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Bad Loan Issue: Lenders May Settle for 56% Haircut for Defaulter Steel Companies
June 28, 2017
With regard to the major steel firm defaulters, the lenders may have to write off more than half of their loans for settlement. According to Credit Suisse, they may need to take high haircuts of 56% of the assets due to the extremely high debt on these companies.
Out of the top 12 defaulters that were identified by the RBI and are facing bankruptcy proceedings, 5 are steel firms viz. Bhushan Power and Steel, Electrosteel, Essar Steel, Monnet Steel, and Bhushan Steel. The total value of their pending loans balance stands at Rs. 1 lakh crore.
