Stressed plants acquired via IBC seeing faster turnaround
Steel Insights|August 2021
Stressed steel plants acquired under the Insolvency and Bankruptcy Code (IBC) resolution process are seeing faster returns, says rating agency CRISIL in a research.

Despite pandemic-linked blips, domestic demand outlook remains strong, which has helped acquirers ramp up utilisation levels. The ongoing steel upcycle will also mean stronger-than-expected realisations over the medium term.

“Consequently, acquirers may see 20 percent faster payback and are well set to tap the brownfield potential housed under these assets,” says the report.

The findings in the report are based on a study of five stressed steel capacities - Bhushan Steel Ltd (renamed as Tata Steel BSL), Essar Steel Ltd (renamed as Arcelor Mittal Nippon Steel India), Electrosteel Steels (now ESL Steel), Monnet Ispat & Energy (now JSW Ispat Special Products) and Bhushan Power & Steel - totalling 21million tons (mt), which were acquired under NCLT, mostly by other primary steel producers. These assets accounted for 70 percent of total financial claims resolved or liquidated under IBC in the steel sector till March 31, 2021.

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