You are here: Home » Companies » News
Business Standard

Edelweiss ARC, Indostar buy out exposure of lenders to BMM Ispat

An SBI-led consortium of lenders had initiated auctioning of their exposure to the debt-ridden steel firm as a part of their non-performing asset recovery process

Subrata Panda & Dev Chatterjee  |  Mumbai 

steel

Non-bank finance company and Edelweiss Asset Reconstruction Company have bought an exposure of the lenders to Bengaluru-based-steel firm in a financial asset auction, conducted by State Bank of India (SBI).

An SBI-led consortium of lenders had initiated auctioning of their exposure to the debt-ridden steel firm as a part of their non-performing asset recovery process. The lenders had a total exposure of Rs 2,500 crore to the debt-ridden company, which is involved in manufacturing and marketing of steel and cement products like pellets, sponge irons and TMT bars. In addition, it supplies power to the state and national grids.

Of the Rs 2,500 crore, loans worth Rs 1,748.73 crore have been auctioned by the consortium of lenders for over Rs 970 crore. had the highest exposure among all the lenders, which was to the tune of Rs 755.71 crore, according to the document prepared for the auction. coordinated the work on behalf of the eight lenders.

Apart from SBI, the other banks who had the exposure to the company were Bank of India, Oriental Bank of Commerce, Punjab National Bank, Axis Bank, Vijaya Bank, Dena Bank and Punjab & Sind Bank.

Dinesh Kumar Singhi is the chief executive officer and managing director of the company while Vesta Veera Venkata Raju is the executive director and chief financial officer. According to sources, the company needs further capital expenditure of nearly Rs 700 crore for putting in additional facilities like blast furnace. has been in negotiation with lenders for a long time to acquire assets. However, liquidity freeze created by the default of the beleaguered IL&FS on its debt obligations affected the buyout of Indostar, as the entire NBFC sector faced constraints in borrowing funds from the market. Hence, had to bring in to complete the process, sources said.

has been in the process of auctioning its NPAs to recover dues from various defaulting The amount of loans that SBI is auctioning is Rs 6,169 crore. The account put up for sale by SBI included India Steel Corporation, Jai Balaji Industries, Kohinoor Planet Construction, Mittal Corporation and among others.


(With inputs from Abhijit Lele)

First Published: Wed, April 17 2019. 22:42 IST
RECOMMENDED FOR YOU