Lenders drag Essar Steel to NCLT

Mumbai: Lenders led by SBI on Thursday decided to begin insolvency proceedings against Bhushan Steel, Essar Steel and Electrosteel Steels by referring them to the NCLT for recovery under the Insolvency and Bankruptcy Code (IBC).

The decision was taken at a marathon meeting chaired by the SBI. While Bhushan Steel is in default of Rs 44,478 crore to banks, Essar Steel owes Rs 37,284 crore and Electrosteel Steels Rs 10,273.6 crore.

These three borrowers are among the 12 accounts identified by RBI for immediate reference to National Company Law Tribunal (NCLT). These 12 accounts alone constitute a quarter of the over Rs 8 trillion of NPAs.

Bankers, led by IDBI Bank, will be meeting on Friday to decide on Bhushan Power & Steel which has been in default of Rs 37,248 crore to the lenders. The development couldn’t be immediately confirmed with these companies.

Besides these accounts, the other stressed borrowers include Amtek Auto (Rs 14,074 crore), Alok Industries (Rs 22,075 crore), Monnet Ispat (Rs 12,115 crore) and Lanco Infra (Rs 44,364.6 crore). Era Infra (Rs 10,065.4 crore), Jaypee Infratech (Rs 9,635 crore), ABG Shipyard (Rs 6,953 crore) and Jyoti Structures (Rs 5,165 crore) were also among the identified stressed accounts, according to reports.

“The meeting on these three companies was to finalise the application which banks will be filing to NCLT,” said a banker. Lenders want all the bankers in the consortium to give their consent before registering the case with NCLT.

Officials from these three companies were also present at the meetings, bankers said. On Saturday, Lanco Infratech said the RBI has directed its lead banker IDBI Bank to initiate insolvency procedure for the company.

Once a case is referred to NCLT, there is a 180-day time line to decide on a resolution plan though 90 days can be given in addition.