Now that a resolution for eight stressed companies can be attempted via the Insolvency and Bankruptcy Code, a new list of companies from whom bankers can recover their dues using the insolvency route is expected soon. The Reserve Bank of India (RBI) is understood to be almost ready with a second list of companies that banks can refer to the National Company Law Tribunal (NCLT). This is believed to be a longer one with more than two dozen loss-making, over-leveraged firms. Going by their leverage profile, the next lot of companies to be referred to the NCLT could include Videocon Industries (gross debt of Rs47,554 crore), Jindal Stainless (Rs 3,367 crore), Jaiprakash Power Ventures (Rs 21,098 crore), Aban Offshore (Rs 12,030 crore), IVRCL (Rs 3,579 crore), Uttam Galva Steels (Rs 5,041 crore), Punj Lloyd (Rs 6,126 crore), Soma Enterprises (Rs 1,895 crore) and Shree Renuka Sugars (Rs 6,012 crore).
Earlier, the central bank had identified a dozen firms from whom banks will try and recover their dues. On June 13, it had asked banks to refer 12 large stressed accounts—with loans close to Rs 2.4 lakh crore—to the NCLT. The RBI had added that details of the resolution framework in regard to the other non-performing accounts would be released in coming days. Sources said the internal advisory committee of the central bank will soon intimate the banks about the companies that need to be referred to the NCLT.
“This will hasten the resolution process, including restructuring of debt and bringing in strategic investors in companies where a resolution plan has still not been finalised,” a senior banker said. Meanwhile, NCLT benches have admitted eight of the 12 companies identified by the RBI, with a combined gross debt of more than Rs 1.3 lakh crore to clear their insolvency proceedings. Companies cleared for insolvency proceedings, and for which interim resolution professionals have been appointed, include Bhushan Steel, Bhushan Power & Steel, Alok Industries, Monnet Ispat, Electrosteel Steels, Amtek Auto, ABG Shipyard and Jyoti Structures. Once these cases are admitted by the NCLT, lenders to these companies would need to set up a committee that will come up with a plan for resolution. If that cannot be done in a period of 180 days — this can be extended to 270 days — the borrowing entity will go into liquidation.