Even as banks seek suitors for Essar Steel, which has been referred to the bankruptcy court, brothers Shashi and Ravi Ruia could well find inspiration from similar circumstances almost 20 years ago. Then too, they were facing the ignominy of a possible loss of their steel business.
In 1999, Essar Steel had earned the dubious distinction of being the first Indian company to have defaulted on its floating rate notes worth $250 million. The crisis deepened as steel prices, bogged down by the Asian Financial Crisis, dived to unsustainable levels.
As imports increased, demand for domestic steel also plunged. By 2002, the company had debts of nearly Rs 3,000 crore, and was forced to go into a corporate debt restructuring (C…
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