Ferrous, non-ferrous firms will have to iron out loan-rejig challenges

The K V Kamath Committee has identified 26 sectors, including ferrous and non-ferrous, impacted by the pandemic for a loan restructuring scheme to be rolled out by banks and non-banking financial companies.

The committee has identified five key ratios with different limits across sectors as a threshold for implementing a resolution plan. The five key ratios are: total outside liability/adjusted tangible net worth, total debt/earnings before interest, tax, depreciation, and amortization (Ebitda), current ratio, debt service coverage ratio, and average debt service coverage ratio.

For the steel sector — under stress before Covid-19, and with a current debt of Rs 2.66 trillion