SBI to take Monnet Ispat to NCLT

Lenders to Monnet Ispat on Tuesday gave the mandate to the State Bank of India, the lead lender, to move an application before the National Company Law Tribunal (NCLT) to start the resolution process for the ailing steel firm.

A senior public sector bank executive said the lenders had given their nod to file the application under the Insolvency and Bankruptcy Code.

This follows the Reserve Bank of India’s directive to lenders to initiate a corporate insolvency resolution process (CIRP) against the company.

Rating agency CARE had downgraded Monnet Ispat's loans and debentures to default grade “D” in July 2015 on delay in servicing debt. Later in December 2016, CARE suspended ratings because the company did not furnish the information required for monitoring the ratings.

Bankers would take up the case of defaulting textile unit Alok Industries on Wednesday at the Joint Lenders Forum (JLF), another executive said.

Groundwork is also underway to shortlist interim resolution professionals whose names will be proposed to the NCLT at the time of filing cases.

Lenders on Monday began meetings to initiate proceedings against 12 stressed accounts identified by the central bank. The accounts identified by the RBI include Amtek Auto, Bhushan Steel, Essar Steel, and Bhushan Power and Steel.

The list also named Electrosteel Steels, Era Infra, Jaypee Infratech, Lanco Infratech, ABG Shipyard, and Jyoti Structures as defaulting borrowers.

These 12 accounts referred to by the RBI have debt of more than Rs 5,000 crore each, with 60 per cent or more classified as bad loans by banks as of March 2016.

Meanwhile, lenders to ailing infrastructure company Lanco Infratech will move the Hyderabad bench of the NCLT by the middle of next month.

The consortium for Lanco is led by IDBI Bank. The RBI has given 30 days for approaching the NCLT.

The rules require banks to approach the bench under which the company's registered office falls, according to a senior public sector banker.

The CIRP is mandated at Lanco Infratech with banks having a fund-based outstanding exposure of Rs 7,799 crore and non-fund based outstanding exposure of Rs 3,349 crore as of March 31, 2016.

State Bank of India