AHMEDABAD: Essar Steel has told the Gujarat High Court that its lenders did not initiate bankruptcy proceedings against the steelmaker before the Reserve Bank of Indias June 13 order because of concerns that such a measure would jeopardise the companys operations.
The company, one of the 12 earmarked by the central bank for initiating loan recoveries, believes that the use of the Insolvency and Bankruptcy Code (IBC) by lenders may tip the company toward liquidation, Essars counsel Mihir Thakore said.
Essar Steel has defaulted on more than Rs 40,000 crore of loans, and is contesting the central bank order that it be tried under the bankruptcy courts.
The company says that its loans recast was almost finalised, but delays by the lende…
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