Lenders wary of using IBC for debt resolution over creditors' parity

Secured financial creditors will now get the same - 60.7% of the total amount

The National Company Law Tribunal (NCLAT) order that cleared ArcelorMittal’s bid for Essar Steel and sought to put financial and operational creditors on a par has put bankers in a dilemma: To use or not to use the Insolvency and Bankruptcy Code (IBC) for resolution of debt.

The order, instead of bringing down the curtains on an almost two-year corporate insolvency resolution process for Essar, has split the IBC ecosystem and sent lenders knocking on the door of the Supreme Court (SC). A senior official of the State Bank of India (SBI) said the ruling was a huge negative for