Delays in the sale of assets under India’s bankruptcy law are becoming a key challenge for bidders who “cannot wait indefinitely” because of funding constraints, according to JSW Steel Ltd, Bloomberg News reported. The Sajjan Jindal-run mill, which has bid for many companies under the insolvency law since sales of distressed firms began in 2017, is among bidders who have faced repeated delays in their attempts to buy indebted assets. A bidder has to tie up the capital for investing in an asset when submitting a resolution plan and “it is not possible for any company, big or small, to keep the funding ready forever,” said Seshagiri Rao, joint managing director of the steel mill. Since the Insolvency and Bankruptcy Code was passed in the Indian parliament in 2016, the resolution process has been slowed as courts are inundated with appeals from founders, administrators, lenders and bidders. Lenders to the first 12 companies brought to the insolvency court have lost out on 40 billion rupees ($580 million) in additional income due to delays in the resolution process beyond the time mandated by law, according to rating company ICRA.
