Essar Steel ruling: PSU bank shares rally

16 Novembre, 2019, 21:22 | Auteur: Auguste Feret
  • Image415112019

Analysts said most banks have provided significantly for their exposures to Essar Steel and given the recovery rate of around 90%, there should be significant writebacks. The case had landed up at the Supreme Court because the appellate tribunal of the bankruptcy court had held that the funds from the sale of a bankrupt company should be equally distributed between both financial creditors i.e. banks and operational creditors (suppliers, vendors etc.) who are owed money by the insolvent company.

Shares of public sector banks (PSBs) inched higher at the bourses on Friday, with the Nifty PSU Bank index gaining more than 3 per cent after the Supreme Court said the NCLAT can not interfere with the commercial decisions taken by banks in Essar Steel case. Although the law provides for resolution in a maximum 270 days, a series of cases in various forums resulted in the entire resolution process stretching to almost 28 months. Under IBC, it is the Committee of Creditors that is tasked with taking major decisions along with the resolution professional once proceedings have been initiated by National Company Law Tribunal. "The impugned NCLAT judgment is set aside", the top court said.

The Insolvency and Bankruptcy Code (Amendment) Bill 2019 gives CoC of the loan defaulting company explicit authority over the distribution of proceeds in the resolution process and fixes a firm timeline of 330 days for resolving cases referred to the IBC. There was setback for the government too as the court struck down the provision under IBC making it "mandatory" to complete the insolvency proceedings within 330 days. "This much-awaited judgment also settles to rest numerous points of law under IBC, which were tested in various courts".

A bench headed by Justice R F Nariman clarified that financial creditors enjoy primacy over operational creditors and the adjudicating authority can not interfere with the decision approved by the committee of creditors.

Sidney Crosby To Miss Six Weeks After Core Muscle Surgery
The Pittsburgh captain's absence is another blow to a Penguins team that is already missing Kris Letang and Patric Hornqvist . On the year, the Penguins are 10-6-2 and are now in 4th place in the Metropolitan Division.

Clashes in Paris on 'Gilet Jaune' protests anniversary
Three-quarters of French people surveyed by pollsters Odoxa in October said they thought the movement was not yet over. In many ways it is hard to believe that France's gilets jaunes, or yellow vest, movement is only a year old .

Jeff Probst on the "inappropriate contact,quot; of the surviving contestant"
Castaway Lauren Beck wrote on Twitter , "I did not know ANYONE lied about this situation I definitely did not or wouldn't EVER". We also informed him this was an official warning ". "I am incredibly proud of Kellee for being willing to speak up", he added.

"If NCLT finds that legal parameters are not met, it can send it back to Committee of Creditors, but it cannot tinker with the plan", reports said.

Essar Steel is reeling under a debt pile of Rs. 30,030 crore from financial creditors and Rs. 11,969 crore from operational creditors.

There is no principal of equality between secured and unsecured creditors, said the bench, also comprising Justices Surya Kant and V Ramasubramanian. "The order restores the contours of lenders' claim on collaterals as per the contractual agreement and seniority of claims and also sets a healthy precedent for further resolution down the line", said Lalitabh Shrivastawa, deputy VP at Sharekhan.

"No doubt the ultimate discretion on distribution is with the Committee of Creditors (CoC), whose decision should balance the interests of all stakeholders", the bench said. "This would defeat the entire objective of the Code which is to first ensure that resolution of 89 distressed assets takes place and only if the same is not possible should liquidation follow", it said.



Oil prices hike to $62 amid hopes for US-China trade talks
Meanwhile, Wood Mackenzie Ltd. said it sees a "pretty high chance" that Opec and its allies will slightly extend production cuts next month.

The Mandalorian's first episode is so amazingly Star Wars
Back in September, we posted a report about director Jon Favreau looking into creating a new Star Wars Holiday Special . Episode 2, deftly directed by Dope helmer Rick Famuyiwa, functions much the same way for the audience.

Éric Morena, interprète du tube de 1987, est mort — "Oh ! Mon bateau"
Malade depuis plusieurs mois , il donnait de ses nouvelles à ses fans sur sa page Facebook , s'adressant à eux comme " votre ami le Capitaine du bateau ".

Bale says he gets more enjoyment from Wales than Real Madrid
There was a time where we were relying a lot on them and most of the goal involvements were just those two. Wales take on Azerbaijan on Saturday and then Hungary on Tuesday.

Alerte, Harry Styles annonce une date à l'AccorHotels Arena !
Il en profitera pour offrir la première prestation à la télé de la chanson " Lights Up ". Les billets seront mis en vente à partir du vendredi 22 novembre à 10h .

Giant extinct primate is directly related to orangutans
This means that we can potentially retrieve related data on the evolutionary line resulting in people", says Frido Welker. It's the first time that such outdated genetic materials have been retrieved from warm, humid surroundings.

'Joker' expected to cross $1 billion global box office milestone
In other words, even if Ryan Reynolds' and Ben Affleck's Netflix films end up with record-breaking streams, they won't see another dime.

Wealthy South Korea should pay more for keeping U.S. troops: Esper
Esper traveled to Seoul to hold an annual Security Consultative Meeting with South Korea's Defense Minister Jeong Kyeong-doo. That demand was made during a high-level defence policy meeting in Seoul .

Uber has to pay New Jersey nearly $650 million in employment taxes
Uber may insist that its drivers are contractors and not employees , but New Jersey isn't buying that argument. The New Jersey case is the first in which a local government has sought back taxes from Uber.

Second Ebola vaccine introduced in DR Congo
It aims to broaden the fight against an outbreak that according to official figures has claimed 2,193 lives. Four cases were recorded in Goma in 2019 but no new cases have been reported since August.