Bearing merchants await dues from cos under IBC resolution

Operational creditors, including bearing merchants, have expressed concern over a substantial part of their dues getting stuck from companies that have been referred to the National Company Law Tribunal for resolution under the Insolvency and Bankruptcy Code (IBC).

"We are a worried lot as our old dues have got completely stuck with the companies filed with the NCLT under the IBC," Eastern India Ball Bearing Merchants' Association Chairman-Trust Board Surendra Choraria told PTI.

He said payments were slow prior to the companies getting referred to the NCLT, but now the clearance of dues have come to a standstill.

The steel sector accounts for nearly 30 per cent of sales for eastern region bearing suppliers.

Companies with around 22 million tonnes of crude steel capacity have been referred to the NCLT in the first round of the stressed assets resolution process by the Reserve Bank of India, involving close to Rs 1.6 trillion.

Choraria said as operational creditors' claims are not considered at par with direct lenders, they are also staring at considerable losses, due to sharp haircuts on these accounts.

He said that the association has made a representation to the government to consider amendments, and bring operational creditors and direct lenders on the same page.

Bearing suppliers, however, are hopeful for some recovery of dues in the next six months, association officials said.

Despite the odds, the bearing sector is looking forward to double-digit growth in 2018-19 and the next two fiscal years, due to uptick in demand as manufacturing is on the recovery path, the officials added.