Banks are likely to reject bankruptcy-facing Essar Steel‘s demand for Rs 1,000 crore of working capital loans as the lenders are easing the other monetary restrictions they imposed on the company to safeguard their interests, said two people familiar with the developments.
Banks have decided to do away with the so called Rs tagging’ of Essar Steel’s account which has resulted in restricted flow of funds to the company from its businesses, said those people who did not want to be named.
The move, though it deprives of fresh loans to the beleaguered steel maker, it could release as much Rs 3,120 crore of additional fund annually which may be sufficient to keep the plants running as the company works its way out of the bankruptcy.
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