The Overseeing Committee (OC) has approved Supreme Infrastructure India’s debt recast plan under the scheme for sustainable structuring of stressed assets (S4A), the company said in a regulatory filing on Thursday. The company said of the total debt of Rs 2,404 crore considered under S4A, the sustainable debt stood at Rs 1,271 crore (52.75%) while the unsustainable portion stood at Rs 1,138.74 crore (47.25%). “Of the present promoter holding, approximately 46,13,478 equity shares constituting 17.95% of the existing paid-up equity capital to be transferred to lenders by invocation of existing pledged shares,” it said.
The unsustainable debt of Rs 1,134 crore, the company said, would be converted into optionally convertible debentures (OCDs) for 15 years. The repayment of OCDs will be made in seven equal installments, commencing at the end of the ninth financial year to the 15th financial year (FY26 onwards) from the date of issuance.
According to Bloomberg, the company’s standalone debt stood at Rs 2,040 crore in FY17. The company reported a net loss of Rs 204 crore on revenues of Rs 1,050 crore in FY17. Its bankers include State Bank of India (SBI), State Bank of Patiala (SBP), Union Bank of India, Punjab National Bank (PNB), Bank of India (BoI), Central Bank of India, Canara Bank, Syndicate Bank, ICICI Bank and Axis Bank, among others.
According to RBI guidelines, banks need to convert their debt into equity within 210 days of the reference date, failing which will turn the account non-performing. The statement said lenders are required to formulate the resolution plan and implement the scheme within the time limit prescribed under the S4A guidelines.
Supreme Infrastructure is promoted by the members of the Sharma family who jointly owns 24.75% and by BHS Housing Private Limited which holds 13.04% shares.
The S4A scheme has been viewed as an improvement over the strategic debt restructuring (SDR) plan since it allows banks to retain the promoters whereas the SDR envisaged bringing in a new set of promoters. While banks have initiated an SDR for more than a dozen firms, they have been unable to rope in new promoters for even one company. Many of these exposures have been classified as NPAs.
The scheme, however, does not permit changes in either the moratorium or the payment terms for either the principal or the interest. Banks are permitted to covert the ‘unsustainable’ part of the debt into equity or redeemable cumulative optionally convertible preference shares (CRPS). To be eligible for the scheme, the projects should have commenced commercial operations and the total exposure (including accrued interest should be more than Rs 500 crore. Moreover, lenders need to have provided for at least 20% of the total loans.