Essar Steel lenders to recover over 90% of Rs 42,000 crore

Essar Steel lenders to recover over 90% of Rs 42,000 crore

The Supreme Court’s verdict will see banks recover almost 92% of the ₹42,000-crore Essar Steel owed them, while operational creditors will get ₹1196 crore, boosting the outlook for December quarter earnings for the banks and pushing faster resolutions of multiple other bankruptcy cases in the country.

Banks, that have made provision covers as high as 50-100% in this case, can not only bump up their provision coverage ratios but also consider provision writebacks to boost profits.

“It’s a triple bonanza for banks, not only am I getting bumper recovery, but there will be a 100% provision writeback in this case,” said Mrityunjay Mahapatra, MD, Syndicate Bank. “In fact, if the new owner wants loans to run the company, my exposure of over ₹1000 crore gets redeployed as fresh business.”

Almost 830 days after the Essar Steel case was ordered by the Reserve Bank of India to be sent to insolvency courts, the Supreme Court paved the way for steel magnate Laxmi Mittal’s flagship ArcelorMittal to acquire the domestic steel maker. Read More

Leave a Reply

Your email address will not be published.