India

India’s revamped bankruptcy process is in full swing and investors from Blackstone Group LP to Oaktree Capital Group LLC are salivating over an estimated $210 billion of stressed assets that are up for grabs, Bloomberg News reported. But the courtrooms handling the thousands of bankruptcies are lacking a key component: Judges. Ten benches with a combined 26 judges and technical staff are hearing more than 2,500 insolvency cases, the latest official data show. Based on the workload a year ago, researchers estimated India needs about 80 benches over five years.

Sajjan Jindal-controlled JSW Steel has written to the committee of creditors (CoC) of Essar Steel on inviting fresh bids for the bankrupt firm, Business Standard reported. This has come ahead of the meeting of the CoC on Tuesday. About a month ago, JSW Steel had written to the committee, expressing its interest in taking part in bidding for Essar Steel. However, the CoC had decided not to invite fresh bids owing to time constraints.

Want to screw up a good law? Just try to make it a great one. That's what India did last November when it added a number of restrictions on who could bid for assets in a bankruptcy. The idea of the new regulations was to make it hard for errant owners to regain control of businesses without first settling their dues. But the morality was legal overkill; and that's now evident in the farce that the insolvency of Essar Steel India Ltd. has become, Bloomberg News reported in a commentary.

To many economists, the solution to India’s bad-loan crisis appears as obvious as the problem: Privatize state-owned banks, which have racked up billions more in soured loans and performed much worse than their private-sector counterparts. Yet, unless the government first strengthens its ability to supervise all banks, public and private, selling some of them off will be slim guarantee against another crisis, a Bloomberg View reported. One can understand the urge to privatize. A long-mooted bankruptcy law finally passed last year allows any single creditor to initiate the bankruptcy process.

Vedanta Ltd said on Tuesday it got approval from India's designated court for bankruptcy cases to acquire Electrosteel Steels Ltd. Electrosteel is the first to get approval from the National Company Law Tribunal (NCLT), among a dozen of the country's biggest loan defaulters which were pushed to bankruptcy proceedings last year, the International New York Times reported on a Reuters story. A Vedanta Ltd unit will buy debt-ridden Electrosteel for 18.05 billion rupees ($274.96 million) and provide additional funds worth 35.15 billion rupees, the company said in a statement.

Oaktree Capital Group LLC, one of the world’s largest distressed debt investors, is eyeing India as a key market as the nation overhauls its bankruptcy rules and banks battle with a historic bad debt clean-up, Bloomberg News reported. “I wouldn’t be surprised to see India as another engine of growth maybe in the next three to five years,” said Jay Wintrob, chief executive officer at the Los Angeles-based firm, in an interview in Hong Kong.

Creditors of India's Monnet Ispat and Energy Ltd have approved a joint bid here from AION Investments and JSW Steel to take over the bankrupt firm, according to a regulatory filing on Tuesday. Monnet Ispat is among India's 12 biggest loan defaulters here, which were pushed into bankruptcy last year, as part of the country's new bankruptcy law aimed at cutting close to $150 billion of accumulated soured loans, Reuters reported.

Debt-laden Reliance Communications Ltd (RCom) said on Thursday India’s Supreme Court had lifted a high court stay on sale of some of its assets and allowed its secured lenders to proceed with the sale process, Reuters reported. The top court also directed the company and its secured lenders to file an appeal before the National Company Law Appellate Tribunal (NCLAT) on a stay granted by an arbitration court on the sale of RCom’s tower and fibre assets.

Creditors are pushing for liquidation of Alok Industries Ltd. and Jyoti Structures Ltd. -- which together owe about 380 billion rupees ($5.8 billion) -- as they aren’t happy with bids for the debt-laden companies, said people familiar with the matter, Bloomberg News reported. The only binding bid for textile firm Alok is one from Reliance Industries Ltd. and JM Financial ARC, which offers a price that’s too low for the lenders, the people said, asking not to be named as the information is private. They didn’t provide further details. Alok owes 299 billion rupees, according to official data.

Nearly a third of the companies have defaulted on the loans they have taken from the Council of Scientific and Industrial Research (CSIR). These loans were extended on “easy terms” towards developing new technologies, and to encourage start-ups, The Hindu reported. They were awarded as part of an ongoing scheme since 2001, according to a response by Union Minister for Science and Technology Harsh Vardhan to a question in the Lok Sabha.