MUMBAI: Banks reeling into huge losses due to bad loans are lobbying with the regulators to do away with mandatory `liquidation value’ of companies admitted for insolvency resolution as it automatically brings down the value of bids from potential buyers.
`Enterprise value’ might be a better indicator of the value of a company since it factors the company as a going concern, a group of lenders led by State Bank of India (SBI) has suggested to insolvency administrator Insolvency and Bankruptcy Board of India (IBBI) recently.
Bankers said disclosing liquidation value in the information memorandum to prospective bidders could throw a spanner in resolving stressed loans.
Liquidation value is a piecemeal value considering that the asse…
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