Two years on, debt resolution of first dozen firms still not complete

Of the 12 large accounts which were referred to the National Company Law Tribunal (NCLT) for resolution by the Reserve Bank of India (RBI) in 2017, resolution of seven corporate debtors has been approved and orders for liquidation has been passed in respect of two corporate debtors even as the resolution process for three of the remaining has not concluded.

The combined debt of these 12 large accounts was Rs 3.45 trillion; the amount realised so far is Rs 1.01 trillion. The liquidation value of these 12 large accounts was Rs 73,220 crore.

Electorsteel Steels, Bhushan Steel, Monnet Ispat & Energy, Essar Steel India, Alok Industries, Jyoti Structures and Bhushan Power & Steel are the companies where a resolution plan has been approved. Lanco Infratech and ABG Shipyard are under liquidation. Bhushan Steel has the highest realisation as a percentage of claims, at 63.5 per cent. Followed by Essar Steel India at 60.7 per cent. Alok Industries is 17.11 per cent is the lowest.

Although the resolution plan for Essar Steel and Bhushan Steel and Power has been approved by the NCLT, these were subsequently challenged before the Supreme Court and National Company Law Appellate Tribunal (NCLAT), respectively. In the case of Essar, the apex court reversed the judgment of NCLAT, where the latter had ruled that operational creditors have to be treated at par with financial creditors at the time of settling claims.

In the Bhushan Power & Steel case, NCLAT has asked the enforce....

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