Check how #bankruptcy law is helping banks and spreading cheer to their balance sheets
1. Tata Steel ensuring a big payday to lenders of Bhushan Steel, one of the largest non-performing assets in the banking system
2 SBI, which also had the largest exposure to the 5-million tonne steel plant, at Rs 12,864 crore, will get back Rs 8,083.30 crore..
3. PNB, with a Rs 4,904-crore exposure, will receive Rs 3,081 crore, giving the bank a breather after the recent letters of undertaking scam
4 Canara Bank, with the third-highest exposure of Rs 2,856 crore, will receive Rs 1,794 crore.
5. ICICI and Axis Bank would get back Rs 1,538 crore and Rs 1,218 crore, respectively, of exposures of Rs 2,448 crore and Rs 1,939 crore.
6 Bhushan promoters owe Rs 56,000 crore to financial creditors.
7. The CoC also agreed on distribution of total pledged shares of 74,302,524, offering financial creditors and trustees future equity upside
8 Here too, SBI will get the largest chunk of 16,648,849 shares while PNB will receive 6,346,913 shares.
9 There is no lock-in and bankers can choose to liquidate their equity positions according to choice.
10 The whole idea of IBC was to help the banking system deal with stress and give creditors the best deal to clean up their balance sheets.
11 The Tata Steel bid translated into a 27% haircut for lenders. Anything less than 50% is a great deal & will result in write back
