Banks are reportedly looking for realisations of around 50 per cent of the face value of loans they transfer to Asset Reconstruction Companies.
That should be enough to derail the entire concept, considering that the sale of Chinese impaired assets has fetched around 8 per cent of face value. Huarong, one of the Chinese asset management companies, is currently holding roadshows in New York to sell around $1 billion of distressed assets.
And while Chinese plant and machinery may be outdated, they at least have the benefit of huge capacities, while most Indian plants on the block have turned sick precisely because they have uneconomic capacities.
