The Supreme Court on November 15 set aside an NCLAT order which gave equal rights to the secured and unsecured creditors during the insolvency proceedings of debt-ridden Essar Steel.
State Bank of India Chairman Rajnish Kumar on Monday said the resolution of Essar Steel will boost profitability in the third quarter of the current financial year. Besides, resolution of other stressed assets which are in the pipeline will have positive impact in the fourth quarter, he said.
The resolution of Essar Steel is a huge positive for the economy, he said. “For MSMEs, I think the Insolvency and Bankruptcy Code (IBC) is not the right route. It is more for the bigger corporates. MSMEs should have a rehabilitation…we are not in favour to take them to the NCLT because it will burden the system unnecessarily,” Kumar said.
He also said there will be money coming in from SBI Card stake dilution in the months to come. The Supreme Court on November 15 set aside an NCLAT order which gave equal rights to the secured and unsecured creditors during the insolvency proceedings of debt-ridden Essar Steel, clearing the decks for its takeover by Lakshmi Mittal-led ArcelorMittal.With the order, the apex court paved the way for ArcelorMittal’s takeover of Essar Steel for Rs 42,000 crore.
The verdict came on a plea of the committee of creditors challenging the NCLAT’s order of July 4 in which it had approved ArcelorMittal’s bid for the acquisition of Essar Steel after it rejected a plea by the lead shareholder of the debt-laden firm challenging the eligibility of the bidder. Essar Steel was auctioned under the new IBC to recover Rs 54,547 crore of dues of financial lenders and operational creditors.