In February, a resolution plan for Sharon Bio Medicine was approved by a bankruptcy court wherein lenders would receive Rs 230 crore against dues of Rs 702 crore. Ideally, secured lenders should have rejoiced, considering if it had gone into liquidation, they would have received just about Rs 175 crore.
A closer look at the resolution plan shows that of Rs 230 crore, only Rs 10 crore would be paid up front, but over 6-8 weeks after all regulatory approvals. The remaining was to be paid over 10 years. Thats not all. There would be moratorium of 12 months on interest payment and 24 months on principal payment. Lenders would have to swap Rs 300 crore into equity and write off the balance loan.
For unsecured creditors with exposure of Rs 1…
Read the full article at: https://economictimes.indiatimes.com/industry/banking/finance/banking/conflict-of-interest-in-resolution-plans-may-erode-ibc-credibility/articleshow/64849092.cms
