Bankers have decided to convert a large portion of loans given to trucks manufacturer AMW Motors into equity using the RBI’s strategic debt restructuring (SDR) tool, sources told FE.
The loss-making AMW Motors, which was hit by the ban on mining in Orissa, Karnataka and Goa, owed a consortium of nine lenders led by IDBI Bank, a sum of R1,432 crore as of March 2014. Gujarat-based AMW’s gross debt at the end of March 2014 was up 25% over March 2013, its filings with Registrar of Companies (RoC) showed.
In FY14 (latest available), the company reported a loss of R103 crore on R840 crore in revenues. Finance costs stood at R164 crore. The company’s debt of R800 crore was restructured under the corporate debt restructuring (CDR) mechanism in September 2013 after being referred to the CDR cell in March 2013.
AMW’s production fell to 30% of its capacity owing to fall in demand. This resulted in cash flow problems and the company is finding it difficult to pay off its debt.
AMW Motors is led by Anirudh Bhuwalka as its managing director and chief executive. fe Bureau