Cos tap CDR cell to rejig Rs 52k-cr loans in Apr-Nov

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Pranav Nambiar: Mumbai, Dec 22 2012, 00:53 IST

Corporate India’s balance sheets are getting increasingly stressed as companies struggle with the slowdown. And banks are bearing the brunt of it. Loans worth a whopping Rs 52,000 crore have been referred to the corporate debt restructuring (CDR) cell between April and November this year and that’s after R50,000 crore of debt having been recast in the first six months of the year. Several large companies have sought lenient terms after their businesses turned weaker. These include Hotel Leela, Bharti Shipyard, GTL and HCC.

Bankers say requests continue to pour in: the CDR cell received requests worth R3,000 crore in November from six companies requesting easier terms. Among these are Parabolic Drugs, Jai Hind Projects and Biltube Industries.

In 2011-12, R39,300 crore of loans were restructured as companies sought easier repayment terms from banks. October saw the largest quantum of referrals so far in 2012-13 at about R14,000 crore; in September, loans worth R7,000 crore were brought to the CDR cell.

The central bank’s new guidelines on restructured assets, based on the recommendations of the Mahapatra Committee, are expected in end-January. The panel has suggested that promoters make a bigger sacrifice to the tune of 15% of the fall in fair value or 2% of the restructured amount, whichever is higher. The RBI group also feels the conversion of loans into preference shares of the company should be done only as a last resort and conversion of the part of loan into preference shares must be capped at around 10%.

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