Lenders of bankrupt Essar Steel are now looking at minimal haircut as top bidder ArcelorMittal has revised its offer up to Rs 42,000 crore against the total claim of Rs 49,000 crore. Furthermore, other companies are also looking for a chance to trump ArcelorMittal’s offer — which would mean more leverage for the lenders.
And one of the reasons behind this case, which may script a big success under the Insolvency and the Bankruptcy Code (IBC), is section 29A — the ineligibility clause included in a hurry to bar wilful defaulters, defaulter promoters and related parties from bidding for any other NPA account.
The ineligibility clause was brought into picture initially via an Ordinance when the Essar Group was found trying to acquire its own bankrupt subsidiary Essar Steel at discount price. Read More
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