Lenders, led by SBI, aim to sell guarantees related to Essar Steel’s loans, facing a tough recovery process. With liabilities at ₹13,751.21 crore, recovery is hindered by asset location and value. Buyers may not cover dues fully, and the reserve price is ₹200 crore. Lawyers outlined the causes of delay. “That process may not always result in full recovery, and it is important to recognize that enforcement can be time-consuming, particularly where assets are located overseas rather than in India. Attaching assets situated outside India will also be an expensive affair for lenders,” said Pratish Kumar, partner, JSA Advocates & Solicitors. Kumar, who specialises in securitisation and direct sale of stressed assets, pointed out that recovery under these kinds of transactions depends on the “nature and quality” of the assets being acquired. “In some situations, the objective may simply be to negotiate and settle the loan. At times, the process may also serve as a pressure mechanism to encourage repayment of the outstanding dues.” Read more
This story also appeared Online.
