SBI-led Consortium Invites Bids for Personal Guarantees from Essar Group Promoters
SBI-led banks seek bids for Essar Group promoter guarantees
The Economic Times
Image: The Economic Times
A consortium of banks led by the State Bank of India has called for bids on personal guarantees from Essar Group promoters Prashant and Ravi Ruia, concerning ₹13,751 crore in residual liabilities. The deadline for bids is June 17, with a reserve price of ₹200 crore.
- 01The total residual liabilities amount to ₹13,751 crore after accounting for recoveries from the 2019 debt resolution of Essar Steel.
- 02The reserve price for the bids is set at ₹200 crore, with a deadline of June 17 for submission.
- 03The banks have recovered nearly 90% of over ₹49,000 crore owed by Essar Steel during the bankruptcy process initiated in 2019.
- 04Personal guarantees were included in the bankruptcy framework in December 2019, allowing lenders to pursue guarantees separately.
- 05The Supreme Court has dismissed challenges from the promoters, enabling banks to resume recovery efforts.
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A consortium of banks, led by the State Bank of India (SBI), is seeking bids for personal guarantees from Essar Group promoters Prashant and Ravi Ruia, linked to ₹13,751 crore in residual liabilities. This amount is calculated after factoring in recoveries from the 2019 debt resolution involving Essar Steel, which was taken over by ArcelorMittal India. The reserve price for the bids is ₹200 crore, with a submission deadline of June 17. Following the completion of the bankruptcy process, lenders managed to recover nearly 90% of over ₹49,000 crore owed by Essar Steel. The remaining liabilities, which have compounded to ₹13,751 crore, include interest accrued post-resolution. Personal guarantees were incorporated into the bankruptcy process in December 2019, allowing banks to pursue these guarantees independently. In 2023, the Supreme Court upheld the banks' right to invoke these guarantees, facilitating the recovery process.
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The recovery of these liabilities could strengthen the financial positions of the banks involved, particularly SBI.
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