India

ArcelorMittal and Russia’s state-controlled VTB Group have hit a fresh snag in their pursuit of Essar Steel India Ltd., an insolvent producer that could fetch at least $6 billion, Bloomberg News reported. Advisers evaluating the offers for Essar Steel are recommending that all the bids be disqualified, according to people with knowledge of the matter. A committee of Essar Steel lenders will meet later this week to discuss the eligibility of the proposals, the people said, asking not to be identified because the information is private.

India’s central bank is reviewing its process for allowing companies to raise money overseas due to concern that any increase in rupee volatility may hurt borrowers’ ability to repay debt, a person familiar with the matter said. The Reserve Bank of India is spending more time scrutinizing companies’ hedging practices, vetting borrowers more closely to prepare for any financial-market fallout from an increase in U.S. interest rates, the person said, asking not to be named as the matter is private, Bloomberg News reported.

The head of India’s Tata conglomerate has promised to offload weaker companies among its 110 operating businesses, in an effort to tackle widespread underperformance within the sprawling group, the Financial Times reported. In a Financial Times interview one year on from his arrival as chairman of holding company Tata Sons, Natarajan Chandrasekaran said that he was determined to build a clearer structure within a group whose operations range from table salt to armoured vehicles and artificial intelligence. “There are a lot of marginal businesses we are in,” Mr Chandrasekaran said.

Billionaire Kumar Mangalam Birla and an investor group led by Dalmia Bharat Ltd. are emerging as the lead bidders for India’s Binani Cement Ltd., which is being sold under the country’s insolvency process, people with knowledge of the matter said. Birla’s UltraTech Cement Ltd. and the Dalmia Bharat consortium have each made cash offers of around 60 billion rupees ($936 million), the people said, asking not to be identified because the information is private, Bloomberg News reported.

Just when many Indian banks thought the worst of their bad debt woes were behind them, new central bank rules are stoking fears that the worst of the soured-loans buildup is yet to come, the International New York Times reported on a Reuters story. The central bank surprised the financial sector this week by halting all of its existing loan-restructuring mechanisms with immediate effect, and rolling out new rules that will push more debt defaulters into bankruptcy courts.

Capital market regulator Sebi will meet credit rating agencies this week to explore ways to have quicker access to information on loan defaults by corporates, The Economic Times reported. With the Reserve Bank of India (RBI) having so far refused to share the sensitive information beyond the banking industry, Sebi is keen that all rating agencies take membership of credit information companies (CICs) to obtain default data that banks have to report to CICs. Many corporates as well as banks are reluctant to share default information with rating agencies.

India’s central bank late on Monday tightened its rules around bank loan defaults, seeking to push more large loan defaulters toward bankruptcy courts and abolishing half a dozen existing loan-restructuring mechanisms, in its latest bid to accelerate resolution of the bad loans problem at Indian banks, Reuters reported. The new set of rules are aimed at creating a “harmonised and simplified generic framework” for resolution of stressed assets in view of new bankruptcy regulations, the Reserve Bank of India (RBI) said late on Monday.

ArcelorMittal is competing with a consortium led by Russia’s VTB Group as bids come in for Essar Steel India Ltd., the largest distressed steelmaker being sold under the country’s insolvency process, people with knowledge of the matter said, Bloomberg News reported. An Indian unit of ArcelorMittal, the world’s biggest producer of the alloy, submitted an offer, it confirmed in a statement Monday. Essar Steel could fetch a valuation of at least $6 billion in a sale, the people said, asking not to be identified because the information is private.

The norms for fast track insolvency proceedings have been tweaked wherein both fair value and liquidation value need to be assessed for the entity concerned. Under fast track mode, the resolution process is to be completed in 90 days, moneycontrol.com reported. The Insolvency and Bankruptcy Board of India (IBBI) has amended the Fast Track Insolvency Resolution Process for Corporate Persons. The board has already revised the norms pertaining to insolvency resolution process for corporate persons. Under this category, the proceedings have to be completed within a maximum of 270 days.

In another relief for debt-laden Reliance Communications, Mumbai-based Smartphone has withdrawn a petition seeking insolvency of the company filed before the National Company Law Tribunal (NCLT), The Hindu Business Line reported. The petition, filed under Insolvency and Bankruptcy Code (IBC), was withdrawn on Friday. Smartphone is a wholesale dealer of batteries and had supplied to telcos, including RCom. The Mumbai NCLT bench — comprising MK Shrawat and BP Mohan — disposed of Smartphone petition as ‘withdrawn’.