StanChart May Wind Up Losing Less on Its Biggest Indian Bad Loan
(Bloomberg) -- Standard Chartered Plc may wind up losing less on its biggest bad loan in India.
Lenders to bankrupt Essar Steel India Ltd. will consider increasing a payout to Standard Chartered to expedite the sale of the troubled Indian mill to ArcelorMittal, according to people with knowledge of the matter. That could smooth over a sticking point in months of court battles as the world's largest steelmaker tries to open shop in the South Asian nation.
Standard Chartered has been seeking repayment on about 35.6 billion rupees ($513 million) of loans to Essar Steel. The steel maker is the highest-profile company among the so-called "dirty dozen" debtors ordered by Indian authorities in 2017 to go through the bankruptcy courts.
What's Happening
- A committee of creditors to Essar Steel, led by State Bank of India, will consider distributing nearly 30 billion rupees to Standard Chartered and operational creditors, the people said. While the exact amount that would go to the U.K. lender isn't decided, the amount that the committee had previously agreed to pay the bank was only 600 million rupees, the people said.
- The move is part of an attempt to complete the sale by the end of March, the people said, asking not to be identified as the information isn't public.
- For more details, click here.
Why It Matters
- Standard Chartered has filed a plea to India's National Company Law Appellate Tribunal opposing a decision by a lower court to sell Essar to ArcelorMittal, world's largest steel producer.
- Standard Chartered is opposing the sale to ArcelorMittal as it faces losing a substantial part of monies it has extended to Essar under the deal, according to people familiar with the matter. An Indian bankruptcy court last week approved ArcelorMittal's offer to buy Essar Steel after months of court battles.
Read about StanChart India unit's bad loan pile
Standard Chartered declined to comment, while State Bank of India didn't respond to an email seeking comment.
To contact the reporter on this story: Saloni Shukla in Mumbai at sshukla72@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, ;Candice Zachariahs at czachariahs2@bloomberg.net, Finbarr Flynn, Anto Antony
©2019 Bloomberg L.P.
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