India Banks Warn of Potential ‘Severe Plunge’ in Recoveries After Ruling
- Lenders seek to squash lower court ruling on ArcelorMittal
- Banks oppose ruling that gives proportional amount to vendors
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A group of lenders led by State Bank of India has filed a case in the nation’s Supreme Court seeking to annul a ruling that gives almost equal rights over the country’s largest distressed steel mill’s obligations to lenders and its 1,936 vendors.
Earlier this month an Indian bankruptcy court, that allowed ArcelorMittal’s $6 billion purchase of Essar Steel India Ltd. said the money has to be shared proportionately among all creditors. The judgment will enable vendors such as Associated Road Carriers Ltd. to get 60% of its 11.2 million rupees ($163,000) of dues, while State Bank of India, which lent 132 billion rupees against collateral, will be entitled to get 60.7% of the loan.