Lenders may have to take bigger haircuts

According to a report, the fear of insolvency will force all stakeholders to seek remedial measures

With five steel companies facing insolvency proceedings, industry observers are unsure about the quantum of haircut lenders would have to take if the companies are put on the block. 

Haircut is the term for the write-off a lender accepts on a debt payment when a borrower can’t repay what is due.

Lenders, led primarily by State Bank of India (SBI), had earlier rejected offers from prospective buyers for the debt-laden firms because they would have to take huge haircuts on the dues. For example, Sajjan Jindal-promoted JSW Steel’s offer to take over Monnet Ispat in February would have been no relief for