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Breakthrough seen in SBI's offer to take 50% haircut for Uttam Galva

The SBI offer is good news for all companies as it shows that banks are willing to settle the matter, said Mumbai-based lawyer

Dev Chatterjee  |  Mumbai 

Uttam Galva
File photo

The State Bank of India’s (SBI’s) offer in the National Company Law Tribunal (NCLT) to settle Steels’ debt with the current promoters, the Miglani family by taking a 50 per cent haircut has led to similar settlement offers from other facing action under the (IBC). Lawyers of several stressed said they planned to move the to make similar offers. Most of them had offered to settle accounts even before these were sent to the But these offers were not accepted by the and the Reserve Bank of India (RBI) last year. There are at present about 500 cases pending in Benches across the country. Since June last year, the RBI has prepared a list of 40 high debt which were referred by banks to the for “The offer is good for all as it shows that banks are willing to settle the matter instead of prolonging the crisis. There have been almost 50 per cent job losses in these and production has come down substantially,” said a Mumbai-based lawyer. One of the top battling it out in the over is the Anil Ambani-owned It is facing proceedings in Ahmedabad, after IFCI moved the tribunal in November last year.

But other banks including are willing to settle this case. Similarly, Videocon Industries has moved the Bombay High Court against and the RBI for referring it to the Videocon has also offered to repay all loans by selling its Brazilian assets. was the first company to move the court against the RBI after it was referred to the in June last year. Essar Steel’s is pending with the “There were many whose restructuring proposals were approved but not implemented and these were referred to the What was the logic of not implementing the approved proposal? Others were not sent to the despite being on the NPA list,” said the CEO of a company with debt in stress, asking not to be named. Another good for the stressed assets has come from the Andhra Pradesh and Telangana High Court has ruled in favour of Arnak Aluminium after the company moved against SBI, the RBI and the Union government for referring it to the in January. In an order on March 7, the court said the company’s matter needed closer examination as it had already paid Rs 1.25 billion as one-time settlement. It had to pay the second tranche of Rs 2.75 billion by March 2018. The court said if Anrak Aluminium failed to pay the second tranche by March end then its order would not benefit the petitioner and would be automatically rescinded. Anrak Aluminium was in the second list of 28 prepared by the RBI. Bidders, current promoters and lenders said the vague rules of the IBC and the amendments later had made the exercise highly litigious. “Most of the cases will be finally decided by the Supreme Court as neither the lenders nor the are satisfied with lower court orders,” said a lender.

First Published: Thu, March 15 2018. 00:06 IST