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Shares of Electrosteel Steels gained nearly 20 percent intraday on Thursday as investors cheered a bail out offer for the company. It owes around Rs 10,000 crore to 27-member consortium led by State Bank of India.
Edelweiss Group is said to have made an offer to bail out the company and has offered a loan of Rs 1,400 crore to complete Bokaro plant expansion, sources told CNBC-TV18. The loan is a senior debt, which means that it will get a priority in repayment.
The report further added that Piramal Group withdrew the offer to acquire 51percent equity in Electrosteel Steels.
Going forward, this debt could witness a deep restructuring, where Rs 5,000 crore could be sustainable, while the rest may be converted into convertible redeemable preference shares and OCDs.
The stock gained nearly a percent in the past one month, while its three-day gain stood at 20 percent.
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