IBC ordinance won't impact valuation of assets under resolution: SBI chief
23 Nov 2017 10:28 PM IST
Mumbai: Valuation of the stressed assets facing insolvency proceedings is unlikely to be impacted with the Ordinance that debars promoters who have been tagged as willful defaulters from bidding for such assets, SBI chairman Rajnish Kumar said.
"The changes in the law will not bring down the valuation of the assets under resolution because there is lot of interest in these assets. Valuation has nothing to do whether the existing promoters are allowed to bid or not.
Assets will go only on the fair value of the enterprise," Kumar told reporters.
There were some reservation by a few lenders and some bidders over the promoters bidding for their own stressed assets.
In June, the Reserve Bank had asked lenders to refer the 12 largest NPA accounts to the National Company Law Tribunal (NCLT) for resolution under the bankruptcy code. The combined debt of these accounts is Rs 2.4 trillion.
Some of the accounts include Bhushan Steel, Essar Steel, Bhushan Power, Lanco Infra, Amtek Auto among others.
Out of the 12 accounts, 11 are at various NCLTs and interim resolution professional (IRPs) have been appointed.
These resolution professionals have invited expressions of interest for a resolution plan from prospective investors.
Then in August the RBI again tagged 28 more large accounts for resolution through NCLT, which have to be resolved by December 13.
Kumar also said the amendments will not have any impact on the numbers of bidders who want to participate in the bidding process for such stressed assets.
"This presumption that there would be a few bidders is itself not correct. If there is value in any asset then we believe bidders will be very much interested. If you look at the expression of interest for many of the companies that are under NCLT, there is a good interest," he said.
He said the interest from bidders for a stressed account will be driven by the outlook for that industry and the quality of the asset.
Kumar said certain criteria such as credibility of the bidders and a sound resolution plan will be checked before selecting a final bidder.
When asked whether he is happy with the current amendments, Kumar said, "I will be happy when the resolution happens. I don't mind some haircut but I don't want to be bald."
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