State Bank of India (SBI), which had put its ₹15,431-crore exposure to Essar Steel on the block to sell it to asset reconstruction companies and other financial institutions, is not likely to pursue the proposal further. The auction received lukewarm response because a resolution on the issue is expected soon through the bankruptcy proceedings.
In January, SBI decided to sell the exposure to Essar Steel and the e-auction was scheduled for January 30. However, the auction process received response only from one prospective buyer.
Case at NCLT
The Essar account was referred to the National Company Law Tribunal for resolution and the committee of creditors had selected the ₹42,200 crore bid by ArcelorMittal India Pvt. Ltd. Then, Essar Steel submitted a bid which was about ₹12,000 crore more than ArcelorMittal’s offer.
However, the National Company Law Appellate Tribunal (NCLAT) has now asked the NCLT to complete the hearing by February 19 and decide thereafter. The matter has been listed for hearing on February 28 at the NCLAT.
“Since the matter is expected to reach a conclusion, SBI is not likely to resume the auction process of Essar Steel loans,” a banking industry source said.
