The committee of creditors to Bhushan Steel is reluctant to sanction fresh interim funding of around Rs 500 crore as part of the corporate insolvency process, senior bankers told FE. The company already owes banks a whopping Rs 44,500 crore. Bankers said that they conveyed their decision to the resolution professional (RP) Vijaykumar V Iyer, after he presented the plan at a recent meeting.“We have pointed out we already have a large exposure to Bhushan Steel and any additional loans will be difficult to recover,” the bankers mentioned above said. They added that the RP may look at other institutions such as asset reconstruction companies which are keen to offer loans at higher interest rates.
Bhushan Steel, which owes banks a whopping Rs 44,447 crore, had initially objected to the insolvency proceedings alleging SBI had inflated the dues by around Rs 100 crore. The company’s counsel had said that SBI classified both term loans and working capital as default debt but the company had not received a recall notice for the entire amount. The counsel claimed 65% of the debt referred to as default was in the form of working capital. However, the NCLT had admitted insolvency proceedings against the company in July.