INSUBCONTINENT EXCLUSIVE:
MUMBAI: Mortgage lender Housing Development Finance Corp (HDFC) has sold its Rs 1,000 crore loan in Essar Steel to an asset reconstruction
company at a 30per cent loss as the resolution of the bankrupt metals company drags on with promoter Ruias-partnered Numetal and billionaire
Lakshmi Mittal battling it out in courts.
With the resolution of other steel firms such as Bhushan Steel and Electrosteel Steels signalling
that there is enough demand for steel producers due to revival of fortunes, HDFC managed to wrest 20per cent points more than what Indian
Overseas Bank managed a few quarters ago, said people familiar with the transaction.
Edelweiss Asset Reconstruction Co, the biggest in the
business, is learnt to have bought the loan from HDFC and subsequently sold to other financial investors, including international ones, said
Rupee54,851 crore of claims from financial and operational creditors
The resolution professional backed by Alvarez and Marsal has accepted claims of Rupee49,138 crore
bid for the asset.
While many of the first round referred cases such as Bhushan Steel and Electrosteel Steels have been resolved with Tatas
and Vedanta Resources buying out these firms respectively, the fate of Essar Steel is getting dragged as both Ruias and Mittals are
determined to take control of it.
A year ago, Indian Overseas Bank sold its Rupee1,600-crore loan to Edelweiss ARC at a 50per cent haircut
Bank and Axis have sold their exposure to Essar Steel fearing that the resolution would take longer amidst litigation among the bidders.
