SBI sees lukewarm response for Essar loans
MUMBAI: State Bank of India (SBI) saw a lukewarm response for its attempts to sell Rs 15,431 crore in loans given to Essar Steel. The country’s largest bank so far received only one interested bidder for a small portion of the loans on offer, according to sources. Bank of America Merrill Lynch was the sole bidder to submit a bid for Rs 1,900 crore worth of Essar Steel loans. The US bank is said to have offered a little over Rs 1,400 crore, or about 70 per cent of the book value, in cash as part of its bid. The limited interest from bidders is discouraging for banks who are keen to sell loans to distressed firms where a resolution plan is taking time to materialise.
The stressed asset market does not have a huge appetite for these loans at this point. SBI had put these loans on sale on January 16, seeking bidders from the asset reconstruction industry, banks, non-banking finance firms and other financial institutions. Since then, SBI changed the deadline for sale twice, finally settling on February 11 as the final date for inviting bids.