For now, only two days are left for lenders and over 28 troubled companies to restructure their debt, failing which they will be staring at insolvency like 11 others identified earlier by the Reserve Bank of India. Among the 28 companies, big names like Jaiprakash Associates and Videocons are included. And according to SBI Chairman Rajnish Kumar, almost all of these companies are likely to go to National Company Law Tribunal (NCLT). The lenders have asked for an extension for restructuring debt, while negotiations with the two big accounts — Jaiprakash Associates and Videocon — are currently going on.
Whether they successfully restructure their debt or go into insolvency, this can be known only after the deadline is passed, but for now here’s how much these six accounts we know so far have defaulted on:
Videocon: Once a household brand Videocon is reeling currently under a pile of Rs 45,000 crore loan. Negotiations are going on with lenders for the resolution.
Jaiprakash Associates: On failing to deliver ‘Wish Town’, its subsidiary Jaypee Infratech is already in legal soup, which also saved it from going into insolvency; but Jaiprakash Associates’ Rs 22,000 crore loan default is facing the December 13 deadline. Lenders claim that the resolution is in the final stages.
IVRCL Ltd: Hyderabad-based infrastructure player IVRCL Ltd has a loan default of Rs 10,107 crore.
Uttam Galva Steels: Uttam Galva Steels Ltd: Uttam Galva Steels Ltd is one of the largest manufacturers of cold rolled steel. It has a loan default of Rs 4,150 crore.
Besides these four, Soma Enterprises (Rs 1,895 crore) and Asian Colour Coated Ispat (Rs 3,019 crore) are also on the list. According to reports, the resolution for Uttam Galva Steel, BILT, Jai Balaji, Jayaswal Neco, Soma Enterprise and Anrak Aluminium is either complete or is in final stages. In cases such as Ruchi Soya, Orchid Pharma and Uttam Galva Metaliks, lenders did initiate insolvency proceedings well before the deadline, The Economic Times reported.
These 28-30 companies are those accounts that were given six months time for debt restructuring. The lenders have been directed by the central bank to file insolvency plea by December 31 if debt restructures fail. If the cases went to NCLT, banks would have to take 50% of loan amount as a haircut. While the status of these companies hangs in balance now, 12 others earlier identified for immediate insolvency, most of which are up for bidding.
Last month, the government amended the Insolvency and Bankruptcy Code to bar wilful defaulters and defaulting promoters from bidding during the insolvency process.