Banks have asked for a 90-day extension for big accounts like Bhushan Power, Essar Steel, Bhushan Steel and others under the IBC process.
As the 180-day period granted under the Insolvency and Bankruptcy Code (IBC) for resolution of companies with bad loans, banks have asked for a 90-day extension for big accounts like Bhushan Power, Essar Steel, Bhushan Steel and others. Meanwhile, Monnet Ispat and Jyoti Structures have been given a 90-day extension by Mumbai National Company Law Tribunal (NCLT).
All these accounts are from Reserve Bank of India’s first list of defaulters which were identified for an immediate resolution last June. According to the procedure under the IBC, once companies are admitted under the IBC, lenders have to set up a committee to come up with a resolution plan. If that cannot be done in a period of 180 days, which can be extended to 270 days, the borrowing entity will go into liquidation.
Bhushan Steel, the largest manufacturer of auto-grade steel in India, has a loan default of Rs 44,478 crore. The State Bank of India (SBI), the lead bank of the consortium of lenders, had moved the NCLT for recovery of its loan. Bhushan Power and Steel, a sister company of Bhushan Steel, also has a loan default of Rs 37,248 crore. Bhushan Power and Steel was dragged to the NCLT by the Punjab National Bank. Essar Ltd, one of the biggest in India and abroad in the steel sector, has a loan default of Rs 37,284 crore.
Meanwhile, the tribunal also appoints an interim resolution professional (IRP) to manage. From the second list of defaulters, the State Bank of India has taken Videocon to the insolvency court, while the Supreme Court has stayed the insolvency of Jaypee Infratech and Jaypee Associates, given homebuyers concerns. Jaypee Infratech is a subsidiary of conglomerate Jaypee Group founded by Jaiprakash Gaur.
Jaypee Infratech has a loan default of Rs 9,635 crore. In August, NCLT had admitted insolvency petition filed by IDBI bank, but the Supreme Court stayed the order after home buyers filed petitions against the move.