The National Company Law Tribunal (NCLT) will on Wednesday hear the insolvency proceedings against Bhushan Steel and Bhushan Power and Steel, respectively, filed by public sector lenders State Bank of India (SBI) and Punjab National Bank (PNB).
The Principal Bench of the NCLT, headed by its president Justice M M Kumar, had on July 13 directed Bhushan Steel Ltd and Bhushan Power and Steel Ltd to file their objections, if any, by Monday on the petition filed by the two state-run banks.
These two firms are among the 12 stressed assets, with a combine exposure of around Rs 2.4 lakh crore, identified by the Reserve Bank of India (RBI) under the insolvency and bankruptcy law. The central bank asked the lenders to move to the NCLT.
Both SBI and PNB filed the petitions under the Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, where the financial creditor initiates insolvency proceedings with a claim.
Once these cases are with the NCLT, the lenders need to set up a committee of creditors that will come up with a plan on how the asset will be tackled. If the committee is unable to find a solution within 180 days? can this be extended to 270 days? the borrowing entity will go into liquidation.
While Bhushan Steel Ltd has a gross debt of Rs 44,477 crore to the banks, Bhushan Steel and Power Ltd has it over Rs 37,000 crore. Their former has 5.6 mtpa steel-making capacity while the later has 2.3 mtpa. FE