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Bhushan Steel’s discussions with banks for a loan recast under the scheme of the sustainable structuring of stressed assets (S4A) are centered around increasing the sustainable part of the loan.
The steel producer had submitted to banks a proposal that said nearly 52 per cent of its Rs 46,000 crore loans were sustainable. Under S4A, banks divide the loan into sustainable and unsustainable parts and restructure the unsustainable portion. S4A can be invoked only when the sustainable part is at least 50 percent of the unsustainable part. The unsustainable part is restructured by banks.
The proposal was in keeping with the Reserve Bank of India (RBI) norms, said sources close to the development. However, banks are looking for an increase in the percentage of the sustainable part because the outlook for the sector has improved.
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