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Banks are set to miss the original deadline of December-end to complete the resolution process of Bhushan Power & Steel Limited, Electrosteel Steels, Essar Steel and Monnet Steel under the Insolvency and Bankruptcy Code (IBC).
The resolution process of these steel companies are likely to complete only in the first quarter of the next financial year, Business Standard reported. The report said that the bids for Bhushan Steel and Binani Cement are due on December 23 and December 21 respectively.
Potential bidders think that the resolution process is very complicated legally and may see a further delay.
The Reserve Bank of India in June issued a list of 12 stressed accounts to be sent to the National Company Law Tribunal for resolution under the IBC route. These accounts include Essar Steel, Bhushan Steel, Bhushan Power, Alok Industries, Electrosteel Steels, JP Infra, Lanco Infratech, Monnet Ispat, Jyoti Structures, ABG Shipyard, Amtek Auto and Era Infra.
As per the IBC rules, lenders to these companies have to set up a committee to line up a resolution plan once the cases are referred to IBC. If that cannot be done in a period of 180 days — this can be extended to 270 days — the borrowing entity will go into liquidation.
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