Jyoti Structures shares surged as much as 9 per cent in the morning trade on Wednesday after sources told Financial Express newspaper that lenders to the loss-making company have decided to convert Rs 307.6 crore of loans into shares at a value of Rs 26.90 apiece, a premium to the current market price. The move is part of a strategic debt restructuring (SDR), a scheme outlined by the Reserve Bank of India (RBI) earlier this year.
At 9.32 am, the share price of Jyoti Structures were trading 6.78 per cent up at Rs 18.90. The scrip opened at Rs 18.50 and had touched a high and low of Rs 19.30 and Rs 18.45, respectively, in trade so far. The share price of the company later closed 7.91 per cent up at Rs 19.10.
The consortium of 21 lenders is led by State Bank of India (SBI). In FY15, the Mumbai-based company reported a net loss of Rs 396 crore on the back of Rs 3,111 crore in revenues and its interest expenses almost doubled to Rs 426 crore in FY15. In Q1 FY16, Jyoti Structures reported a net loss of Rs 152 crore owing to Rs 158 crore in interest costs.
In the past one year, the share price of Jyoti Structures plunged 54.50 per cent to Rs 17.70 on December 1. The benchmark index Sensex fell 8.37 per cent during the same period.
The promoters holding in the company stood at 23.79 per cent while institutions and non-institutions held 23.57 per cent and 52.64 per cent respectively.
Following rules put out by the RBI in June, this year bankers have decided to try out a restructuring for a handful companies including Electrosteel Steels, Lanco Teesta Hydro Power, Monnet Ispat, Coastal Projects and IVRCL.
Jyoti Structures is an engineering, procurement and construction (EPC) service provider.