A single-judge bench at the Ahmedabad NCLT of Justice Bikki Raveendra Babu has scheduled the case for July 24
NCLT needs to decide … whether the petition is … to be entertained: Gujarat HC
Essar Steel had moved the court against Reserve Bank of India for initiating insolvency procedure against it. The apex bank has issued a release on June 13 directing the banks to start insolvency procedure against a dozen stressed companies including Essar.
Trouble: RBI had on June 13 asked banks to refer a dozen troubled firms — with a combined debt of close to Rs 2.4 lakh crore — to the NCLT and said that “such cases will be accorded priority by the NCLT”
The matter pertains to the insolvency proceedings initiated by SCB against ESIL before NCLT under the provisions of the Insolvency and Bankruptcy Code, 2016 following a direction in that regard from the Reserve Bank of India dated June 13, 2017.
Steel companies account for 50 per cent of 12 large corporate defaulters identified by the Internal Advisory Committee of the RBI for insolvency proceedings. The total debt of 12 companies is estimated to be around Rs 2.5 lakh crore.
Essar Steel is one of India’s leading integrated steel producers with an annual Pellet making capacity of 20 MTPA and steel making capability of 10 MTPA.
The conversion of rupee loans into dollar will also increase the tenor of repayment to an average of around 10 years.
The government had imposing a 5 per cent export duty on iron ore last week, which companies say has dealt a body blow to their investments.
According to industry sources, Essar had approached state-owned Export Credit Guarantee Corporation but it responded with reluctance.
Pre-export funds are borrowed against confirmed orders from foreign buyers.
To improve services,the Reserve Bank has asked banks to display a message to let customers know about the non-availability of cash
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