After identifying 12 big defaulters for insolvency proceedings in June, the Reserve Bank of India (RBI) is believed to have drawn a second list of about 30-40 companies for resolution of bad loans through Insolvency & Bankruptcy Code (IBC). Videocon, Castex Technologies, Visa Steel, JSPL and IVRCL are said to be part of the newly prepared list. This, however, could not be independently confirmed with the companies.
Most of the companies on the list are said to be from the infrastructure and power sectors. The debt levels among these companies vary between Rs 3,000 crore and Rs 50,000 crore. IBC has defined timeframe for the resolution and there is a 14-day time period for admission or rejection of a case by the National Company Law Tribunal (NCLT). After a case is accepted by NCLT, the creditor would get 30 days to hire insolvency practitioners and then the entire process is to be completed in 180 days which will look at various possibilities including revival of projects or liquidation.
Based on the recommendations of an internal advisory committee, the RBI had earlier identified 12 companies that owe lenders Rs 2.4 lakh crore, which banks have referred to the National Company Law Tribunal (NCLT) for resolution through IBC. These companies were mostly from steel and infrastructure sectors. Each of them is having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of the total NPAs of banks.
The banking sector is exposed to non-performing assets (NPAs) worth Rs 8 lakh crore as on March 31, 2017, or 9.4 per cent of the total outstanding loans, compared to Rs 6.1 lakh crore as on March 31, 2016.
The government and RBI have taken co-ordinated measures to address the issue but with little success. The RBI had offered various resolution tools such as corporate debt restructuring (CDR), strategic debt restructuring (SDR), the 5:25 scheme and the Scheme for Sustainable Structuring of Stressed Assets (S4A).
In a recently released study, Crisil said the top 50 stressed assets need Rs 2.4 lakh crore haircut on the estimate that banks may have to take a haircut of 60 per cent on total assets worth Rs 4 lakh crore. This means lenders’ permanent loan losses from those particular accounts may be half or three-fourth of their total debt outstanding.
The accounts identified by the RBI in the first list include Amtek Auto (Rs 14,074 crore), Bhushan Steel (Rs 44,478 crore), Essar Steel (Rs 37,284 crore) Bhusan Power and Steel (Rs 37,248 crore), Alok Industries (Rs 22,075 crore), Monnet Ispat (Rs 12,115 crore) and Lanco Infra (Rs 44,364.6 crore). Also on the list are Electrosteel Steels (Rs 10,273.6 crore), Era Infra (Rs 10,065.4 crore), Jaypaee Infratech (Rs 9,635 crore), ABG Shipyard (Rs 6,953 crore) and Jyoti Structures (Rs 5,165 crore).
— With inputs from TickerNews Service