Calling it a historic breakthrough in resolving legacy issues of banks, Finance Minister Piyush Goyal said that lenders recovered almost entire principal loan of Bhushan Steel through Rs 36,400 crore transparent bid by Tata Steel and also got 12 per cent stake in the company.
"With recovery of NPAs (non performing assets), banks will now be in a position to offer more and affordable credit to major sectors of the economy especially the MSME (Micro, Small and Medium Enterprises) sector. This will boost employment and the economy even more," Goyal said in a tweet.
He said that creditors received almost four times the value of liquidation value of Bhushan Steel which was pegged at Rs 14,541 crore.
"This was possible due to the robust and transparent Insolvency and Bankruptcy Code brought by this government," Goyal said.
"For the first time such a large loan resolution has been achieved through upfront payment received by banks through sale of a company. This is a record step towards resolving the legacy of unprecedented amount of bad bank loans inherited by this government," the minister said.
He added that the Narendra Modi government was "systematically cleaning the financial and economic mess left behind by the Congress".
"Cleaning up banks and resolving NPAs is part of Congress-mukt Bharat (Congress-free India)."
He said the NPA resolution process was being done through a fair and transparent Insolvency and Bankruptcy Code which has been recognized by international credit rating agencies as well.
Earlier, Tata Steel said in a statement that the admitted CIRP cost and employee dues have been paid as required under IBC (Insolvency and Bankruptcy Code).
"Further, the settlement of the amounts equivalent to Rs 35,200 crore towards financial creditor of BSL is being undertaken... Rs 1,200 crore will be paid to the operation creditors of the company over a period of 12 months," the steelmaker said.
It added that the investment from its subsidiary in the insolvent company has been done through a combination of equity of Rs 158.89 crore and inter-corporate loan of Rs 34,973.69 crore.
Additionally, Rs 100 crore has been paid by the subsidiary company to the financial creditors of the bankrupt firm, it said.
The steel maker also said the acquisition is being financed through a combination of external bridge loan of Rs 16,500 crore availed by its subsidiary and balance amount through investment by it in BNPL.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
