Kolkata: State Bank of India (SBI) has pushed back the cut-off date for inviting e-bidding of its Essar Steel loan exposure to February 11. The state-owned lender made plans to sell over Rs 15,431 crore worth bad loans belonging to Essar Steel to recuperate its dues from the steelmaker. The move comes as the delay in the company’s insolvency resolution process was criticised by ArcelorMittal, which has been named the highest bidder by Essar Steel’s lenders.
The lender has also set the aggregate reserve price for the recovery of bad loans for the full-cash sale at Rs 9,588 crore. SBI, which has the largest exposure to the steelmaker’s bad loans, took the decision on the request of potential buyers. The e-auction for the loan was earlier scheduled for January 30. Additionally, SBI postponed the last date for submitting an expression of interest (EoIs) for the bidding to January 30. SBI had previously deferred the deadline for inviting bids from January 18 to January 23.
“The same banks have a bid from ArcelorMittal and they’re selling their debt at an 18 percent discount to our bid. That’s a lot of wasted money. India’s state-owned lenders are not rich enough for such a loss.”
ArcelorMittal, the largest steelmaker in the world, was chosen by SBI to take over debt-laden Essar Steel for about Rs 42,000 crore but the Ruias, promoters of Essar, returned with an offer to fully pay its dues with Rs 54,389 crore.
The National Company Law Appellate Tribunal (NCLAT) directed Ahmedabad’s bench of the National Company Law Tribunal (NCLT) to pass an order on the insolvency resolution plan submitted by Essar on January 31.
“The same banks have a bid from ArcelorMittal and they’re selling their debt at an 18 percent discount to our bid. That’s a lot of wasted money. India’s state-owned lenders are not rich enough for such a loss,” ArcelorMittal president Aditya Mittal reportedly said.