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Why insolvency Ordinance was needed

If assets are sold to the same promoters, haircut for banks will be less since a new investor would want a higher discount for an unknown asset

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Shyamal Majumdar
The Insolvency and Bankruptcy (Amendment) Ordinance, which has made it difficult for promoters to buy back their assets, has raised a lot of heat and dust. Most promoters impacted by the Ordinance have said it is grossly unfair to keep them away from bidding. Some lenders have expressed concerns that absence of promoters can bring down the price of the stressed assets. The logic goes like this: If assets are sold to the same promoters, haircut for banks will be less since a new investor would want a higher discount for an unknown asset. “I am willing to take a
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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