Steel stocks are awaiting the outcome of the corporate debt restructuring proposal which is scheduled to be discussed and cleared by the financial institutions on January 20.
The lending consortium led by IDBI has proposed that the promoters of the three companies - Essar Steel, Jindal Vijaynagar and Ispat Industries - be required to write down the equity in these companies by 40 per cent.
This is among the many conditions imposed by the FIs before approving the restructuring proposal. The restructuring proposal clearance will prove to be a major booster to the debt-ridden steel companies as it will also involve reduction of the interest rate.
However, the steel companies are not really happy about the writing down condition as well as pledging of the promoters