The National Company Law Tribunal (NCLT) will on Wednesday hear the insolvency proceedings against Bhushan Steel and Bhushan Power and Steel respectively filed by public sector lenders State Bank of India (SBI) and Punjab Nataional Bank (PNB).
The Principal Bench of the NCLT, headed by its President Justice M M Kumar had on July 13 directed Bhushan Steel and Bhushan Power and Steel to file their objections, if any, by Monday on the petition filed by the two state-run banks.
These two firms are among the 12 stressed assets, with a combine exposure of around `2.4 lakh crore, identified by the Reserve Bank of India (RBI) under insolvency and bankruptcy law. The central bank asked the lenders to move to the NCLT.
Both SBI and PNB filed the petitions under the Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, where the financial creditor initiates insolvency proceedings with a claim.Once these cases are with the NCLT, the lenders need to set up a committee of creditors that will come up with a plan on how the asset will be tackled. If the committee is unable to find a solution within 180 days ? this can be extended to 270 days ? the borrowing entity will go into liquidation.
While Bhushan Steel has a gross debt of `44,477 crore to the banks; Bhushan Steel and Power has it over Rs 37,000 crore. Their former has 5.6 mtpa steel-making capacity while the later has 2.3 mtpa.