The Indian government will invite international steel companies and private equity investors to take a look at financially stressed Indian steel companies which have been referred for bankruptcy, a government official said on Monday, July 24.
Indian commercial banks have already invoked new bankruptcy laws against stressed domestic steel companies, referring them to the National Company Law Tribunal and, once these assets are claimed by the lenders, they could prove to be attractive options for either international steel companies keen on marking a footprint in the Indian market or for private equity investors, the official said.
The government official pointed out that several global private equity investors have expressed ambitions to set up Asset Reconstruction Companies in India and their applications are currently pending before the government.
Such Asset Reconstruction Companies would be invited to look at financially stressed Indian steel companies by domestic lending banks, the official said.
Even though these are still early days to look at concluding transactions and new equity inflow into the steel companies as the due process of bankruptcy would have to be completed, the preliminary involvement of international steel companies and private equity investors would enable the evolution of a price discovery mechanism and valuation estimates of the stressed steel assets, the official added.