The country's largest lender, State Bank of India (SBI), on Friday said it's hopeful of recovering a significant portion of money from Essar Steel after National Company Law Tribunal (NCLAT) verdict.
In an interview to CNBC-TV18, Rajnish Kumar, chairman, said, “We were not sure that when the order of NCLAT will come and that is why we wanted to have alternate options.”
The chairman further added that insolvency process remains the preferred option for the bank if the process completes before September 31.
“These are complex issues that we have to appreciate. It is a new law and lot of precedencies are being set. So the lenders, all of them and including SBI, we are very happy on the clarity brought on Section 29A, which will have far reaching implications for many other cases and not only Essar Steel,” Kumar said.
Earlier, SBI said it has withdrawn the process of sale of debt of Essar Steel to asset reconstruction companies (ARCs) after the NCLAT asked lenders of the debt-ridden firm to consider the second round bid of Numetal and mining baron Anil Agarwal-led Vedanta.
The NCLAT Friday ruled that second round bids put in by Russia's VTB Bank-based NuMetal and Vedanta for acquisition of Essar Steel are valid but the same of ArcelorMittal is contingent upon the company clearing Rs 7,000 crore dues of Uttam Galva and KSS within three days.
SBI, the lead lender, was planning to sell its loan to Essar Steel to asset reconstruction companies, according to sources.
(With inputs from PTI)