
How a bad loan sale revived a company’s fortune
Mumbai:Distressed funds that have bought sticky loans of BMM Ispat for half the value, as banks sought for immediate realisation of the receivables, have brought about a turnaround at the steel products maker.
Edelweiss Asset Reconstruction Company, along with IndoStar Capital, bought the loans at about Rs 1,500 crore. With the company’s main plant in Karnataka’s Bellari resuming operations, they are now expecting at least 50% returns on the investment.
All stakeholders have benefited out of this, said RK Bansal, the managing director at Edelweiss ARC. “Banks have recovered money faster and at optimal prices, and the ARC has helped to turnaround the business," Bansal said. “We are in talks with three banks to buy out the residual debt,” he said.
There were about a dozen banks that had len