India's bid to free thousands of crores of rupees stuck in non-performing assets (NPAs) has recorded its second-biggest successful recovery after global resources major Vedanta acquired management control of Electrosteel Steels Limited (ESL) under the Insolvency and Bankruptcy Code, said a report in Financial Express.
This is the second successful resolution of a stressed steel asset after Tata Steel acquired Bhushan Steel. Vedanta has deposited Rs 5,320 crore in an escrow account of ESL for 90 per cent equity in the bankrupt alloy maker, said the report.
Moving ahead, Anil Agarwal-owned company has already named a new board to run the distressed steelmaker. The company has nominated Rashmi Mohanty, P K Mukherjee (former Sesa Goa managing director) and Naveen Singhal, who is currently chief executive of Vedanta Sesa Goa Iron Ore, as its nominee directors on the reconstituted board of ESL.
While Bhushan Steel and Electrosteel have been resolved successfully, other 10 are at different stages of resolution. The Reserve Bank of India had identified 12 big accounts constituting 25 per cent of India’s total non-performing assets for immediate resolution.