Essar Steel’s lenders are left with just two options

With no buyer in sight, lenders to Essar Steel can now either auction bad loans to ARCs or let banks pick a 30% stake in the firm while promoters retain control.

“The key problem here is that measures are focused on just regularizing interest payments rather than turning around the company. Once that becomes the focus, banks or ARCs can make some material changes,” said Nirmal Gangwal, managing director of Brescon Corporate Advisors Ltd, a restructuring and turnaround firm.