Resolution of Bhushan Steel bankruptcy is credit positive, says Moody's

Within steel sector's non-performing loans, Bhushan Steel is largest representing 40% share

Sale of debt-laden Bhushan Steel, which is one of the largest non-performing assets in the country, is credit positive as it will help improve banks' asset quality metrics and set precedent for resolution of other non-performing assets, particularly in the steel sector, Moody's Investors Service said on Friday.

On Wednesday, Tata Steel via exchanges informed that it has emerged as the highest bidder to acquire controlling stake in Neeraj Singhal-promoted Bhushan Steel which is undergoing a resolution under India's 2016 Insolvency and Bankruptcy Code. Tata Steel did not disclose the final purchase price or the transaction's terms and conditions.

Nevertheless, based on