With the CBI arresting the Vice-Chairman of Bhushan Steel in the Syndicate Bank bribery case, banks are considering engaging the services of a management agency to look after the day-to-day operations of the company to ensure that their Rs 40,000-crore loan exposure is not jeopardised.
Banks, numbering 51, have given loans to the company as part of two lenders’ consortiums – the term loan consortium of lenders is led by Punjab National Bank while the working capital consortium of lenders is led by State Bank of India.
According to SBI Chairman, Arundhati Bhattacharya, a meeting of the lenders consortium will be called to consider the management agency proposal. Once the lenders are on the same page on this proposal then it will be taken up by the steel company’s board.
SBI has a loan exposure, including fund and non-fund based, of Rs 6,000 crore to Bhushan Steel, which has a steel production capacity of about 2 million tonnes per annum.
The SBI chief said the company has excellent plants. She added that when a fire had broken out at one of the company’s units, the company’s board had accepted the lenders’ proposal to engage the services of a senior fire safety officer.
Bhushan Steel account is a standard asset on the books of all banks, said a senior SBI official.