Mumbai, September 28:
State-owned Indian Overseas Bank has sold its bad debt exposure of 1,500 crore in Essar Steel to Edelweiss Asset Reconstruction Company at a 50 per cent discount to its book value, said sources close to the development.
The deal comes even as the National Company Law Tribunal declared Essar Steel insolvent and appointed an insolvent professional to manage the company. Fearing a huge hair-cut, banks are selling their bad loans to asset reconstruction companies at big discounts.
Interestingly, Edelweiss has been mopping up the bad debt of Essar Steel from lenders. Last October, Axis Bank sold 2,000 crore of its bad debt with Essar Steel Ltd to Edelweiss Asset Reconstruction. Similar deals were also execu…
Read the full article at: http://www.thehindubusinessline.com/companies/iob-sells-essar-steel-bad-debt-to-edelweiss-arc/article9878524.ece