Lenders to refer Bhushan Power, Bhushan Steel NPA cases to NCLT

Lenders to Bhushan Steel will refer the company to the National Company Law Tribunal (NCLT) under the corporate insolvency code, the company said on Friday.

“This is to inform you that the lenders consortium which met in Mumbai on Thursday have authorised State Bank of India (SBI) to refer Bhushan Steel Limited to NCLT under the Insolvency and Bankruptcy Code (IBC),” the company said in a regulatory filing.

The large corporate, which is among the 12 accounts that the Reserve Bank of India (RBI) has indentified to be referred to the IBC, has defaulted on loans amounting to about Rs 44,500 crore to banks.

A joint lenders’ forum led by SBI met on Thursday and finalised the move.

Once a case is filed at the NCLT, there is a 180-day time line with an extension of 90 more days to decide on a resolution plan. If a plan is not decided, then the company will go into liquidation.

Meanwhile Bhushan Power lenders have also agreed to refer the company NCLT for insolvency proceedings, sources have told Moneycontrol.

Bhushan Power, which has a debt of Rs 40,000 crore, will be the eighth company to go to NCLT. The company owes 31 lenders including Punjab National Bank.

The other companies that have been sent to NCLT are: Essar Steel, Lanco Infra, Electrosteel Steels, Monnet Ispat, Jyothi Structures and JP Infra.

Additionally, the JLF for Essar Steel and Electrosteels Steel also met on Thursday to take the companies to NCLT. The two companies are yet to file the same on the exchanges.

Last week, Lanco Infratech had said the central bank has directed its lead banker IDBI Bank to initiate insolvency procedure for the company.

The 12 accounts including the above mentioned companies referred to the NCLT constitute a quarter of the total bad loans in the banking system.