Author: Kala Rao
India
When four foreign creditors refused to go along with a debt-recast plan for Arvind Mills, a leading clothing manufacturer that has hit hard times, it created something of a sensation in Indian financial circles. Then one of the creditors, Commerzbank, filed a criminal suit against top officials of the company and against ICICI, one of the biggest Indian banks and Arvind Mills’ principal creditor, and things began to look ugly. Now a new central bank directive laying out ground rules for restructuring corporate debt seemingly gives big creditors a boost, and has bankers whispering about infringement of creditors’ rights.
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