‘Insolvency and Bankruptcy Code to push consolidation in steel industry’

Source: The Hitavada      Date: 22 Jun 2018 12:52:36


 

 

Business Bureau

THE Insolvency and Bankruptcy Code (IBC) will accelerate consolidation in steel industry and help many global players who have been struggling to enter India, EY said.Many of the cases referred to the National Company Law Tribunal (NCLT), under the IBC process, are from the steel sector, said Anjani Agarwal, EY Partner and Global Steel Leader.“What will be the likely impact of that for the industry. That’s the area of very interesting transformational subject and the whole landscape is suppose to change,” while speaking during India Minerals and Metals Forum here.


The IBC process being on a fast track resolution mechanism, a substantial part of the debt will be quickly realised or renewed and moved to a more sustainable cash flow structures, Agarwal said. “The intense competition amongst bidders also bodes well for potential write backs of the provisions of lenders. A healthier banking industry, with unlocked flow of capital, will now be in a position to fund huge investments required to build new capacity for meeting future metals demand for the country,” he added. There has been a wave of consolidation in the steel industry globally but not reflected within India as yet, he said, adding that insolvency process has triggered this and will also witness the theme playing out domestically. Over a period of a year or so, several key players are already in the process or are on the cusp, would have undergone a resolution, he said.