India

In the central Indian village of Raikheda, the construction of a thermal coal power plant once promised jobs and economic progress. Years after its completion though, the debt-saddled project that promised power supply to hundreds of thousands of homes, sits mostly idle, the International New York Times reported on a Reuters story. It is unable to buy coal to power the plant or sell electricity to utilities. Dozens of nearby stores that were reliant on the project's success have shut down. Raikheda is not alone.

Indian banks taking 12 of the country's largest defaulters to bankruptcy court under a central bank directive, will need to make additional provisioning of at least 180 billion rupees ($2.8 billion), India Ratings and Research said on Tuesday. India Ratings, an affiliate of Fitch Ratings, estimated the current average provisioning towards those 12 accounts at 42 percent, adding the extra provisioning needed would reduce the profits of creditor banks by about a quarter in the financial year to March 2018, Reuters reported.

India's Gujarat High Court on Monday dismissed Essar Steel India Ltd's appeal against a central bank order that asked creditor banks to start insolvency proceedings against the steelmaker, lawyers on the case said. The ruling is a boost to the government, which in May tweaked Indian banking laws to empower the Reserve Bank of India (RBI) to tackle the country's bad debt issue, allowing the RBI for the first time to direct lenders to force defaulters into insolvency courts, Reuters reported.

Emboldened by the Banking Regulation (Amendment) Ordinance, the RBI is expected to push for resolution of bad loans worth around Rs. 8 lakh crore by March 2019, a move that could bring down the NPAs and improve the financial health of banks, a study by Assocham said, Firstpost reported. “So, it should be safe to assume that the non-performing assets (NPAs) mess would largely be resolved by the first quarter of financial year 2019-20,” Assocham study titled ’NPAs Resolution: Light at the end of tunnel by March 2019’ said.

Indian Prime Minister Narendra Modi’s cabinet has signed off on a plan to sell all or part of Air India Ltd., a debt-ridden, state-run carrier with the most unusual baggage, Bloomberg News reported. The airline’s balance sheet includes commercial space near London Heathrow, land in Tokyo, Hong Kong and Nairobi, all bought during the heydays when the airline commissioned paintings by Indian modern artists and hired surrealist painter Salvador Dali in the 1960s to design ashtrays.

Tata Steel Ltd. has completed restructuring its British operations with the sale of two steel pipe mills in the U.K. that were put on the block last year, Bloomberg News reported. The Mumbai-based company has entered into a definitive pact with Liberty House Group to sell its 42-inch and 84-inch pipe mills at Hartlepool, employing about 140 people, it said in an exchange filing on Tuesday, without disclosing the financial value. The transaction is expected to be completed in the next few months. “With this sale, Tata Steel U.K.

In January, Innoventive Industries, a speciality steelmaker based in western India, was forced into the bankruptcy court by its lenders, testing for the first time new insolvency rules that aim to resolve India's $150 billion bad debt overhang, the International New York Times reported on a Reuters story. The company, which makes steel tubes and auto parts for customers including Ford, Volkswagen and Tata Motors, posted its third straight annual loss in 2016, prompting ICICI, one of its lead lenders, to trigger bankruptcy proceedings early this year.

India's Insolvency and Bankruptcy Board on Thursday called for public comment on the country's revised bankruptcy code that went into effect last year, signaling that it plans to tweak the law, which the government hopes will resolve India's $150 billion stressed-loans problem, Reuters reported. The board said the window for receiving comments will be open till Dec 31. Modifications to the regulations would be made by March 31 and take effect from April 1, 2018.

Bhushan Steel Ltd reported a March-quarter loss that was much bigger than stated earlier in its unaudited results, as the debt-laden steelmaker was hurt by higher costs, Reuters reported. Audited net loss for the quarter was 11.31 billion rupees ($174.7 million), compared with the unaudited 7.57 billion rupees loss reported in May, Bhushan Steel said late on Wednesday. However, the fourth-quarter loss narrowed marginally from the 11.85 billion rupees loss it reported a year earlier. Total expenses rose more than 18 percent to 59.94 billion rupees for the quarter.

Ten years ago, Essar Steel was leading a rush of Indian corporate investment, exuberantly funded by the country’s dominant state-owned banks, the Financial Times reported. It paid $1.6bn to buy Canada’s Algoma Steel, while pledging billions more to fund projects in Minnesota and Trinidad as well as a doubling of production at its flagship Indian mill to 8.5m tonnes a year.