Mumbai: With ArcelorMittal crediting Rs 40,000 crore to State Bank of India for the lenders of Essar Steel, a long standing wait has finally come to an end, according to an exclusive report by CNBC-TV18.
Reports pertaining to the matter say that SBI Chairman Rajnish Kumar last month said recoveries from resolution of the Essar Steel insolvency case will add to the lender’s profit in this quarter ending December.
Steel giant ArcelorMittal on Friday transferred close to Rs 40,000 crore to the lead banker, SBI, to take over the debt-ridden company under the new Insolvency and Bankruptcy Code (IBC), the media reported quoting banking industry sources.
All lenders’ dues will be settled by the top credito by Monday (December 16), as per a banking executive who did not wish to be named, it said.
Banks are set to recover more than 90% of their claims against Essar Steel, nearly Rs 40,000 crore. This is supposedly the single biggest recovery under IBC for banks as of yet.
Meanwhile, the operational creditors are set to get Rs 196 crore proposed by Arcelor plus another Rs 1,000 crore later allowed by the creditors' committee, taking the total repayment to Rs 1,196 crore.
The repayment comes almost a month after the November 15th Supreme Court verdict. On November 15, the apex court paved the way for ArcelorMittal to take over Essar Steel for Rs 42,000 crore, giving primacy to secured creditors in any bankruptcy resolution plan. The apex court over-ruled the appellate tribunal NCLAT which asked the banks to share the proceeds equally with the unsecured creditors as well.
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