'Steel sector:NCLT resolution to settle over Rs1.6 tn of debt'

Resolution of insolvency cases in NCLT against the stressed steel companies will settle over half of steel sector's outstanding debt of Rs 3.26 lakh crore, and consolidate the sector further, said a report.

Companies with around 22 million tonne (MT) of crude steel capacity have been referred to the National Company Law Tribunal (NCLT) in the first round of the stressed assets resolution process by the Reserve Bank of India (RBI).

Rating agency Crisil in its report said the resolution of these cases will alter India's steel sector landscape as nearly over half of its outstanding debt of Rs 3.26 lakh crore will stand resolved and about a fifth of India's crude steel capacity held by these companies will move to stronger hands, resulting in better working capital and liquidity management.

"This, in turn, will lead to improving utilisation levels," it said, adding, "The flat steel segment would also consolidate further and be controlled by fewer players - both domestic and global."