The meeting was a curtain-raiser to negotiations between ESL and the noteholders and came exactly three months after the company defaulted payment on the FRN issue raised in 1994. The meeting was attended by FRN-holders representing $100 million notes to deliberate on the comprehensive package prepared by Banc of America Securities (BA Securities) which is acting as an intermediary between ESL and the noteholders.

"Noteholders took stock of the three options and have sought more details on the same and specific plans from the company. These will be provided in consultation with BA Securities shortly. It was pointed out to the noteholders that ESL is committed to arriving at a solution, which is equitable and acceptable to all parties," stated the release. ESL's main offer was to roll-over the loan maturity by 12 years in exchange for the holders being granted secured creditor status.

The other proposals brought before the note-holders were extending maturity by five years, but with an unsecured creditor status and an exit route which is yet to be negotiated.

The exit route proposal may turn out to be a non-starter as FIs and banks have refused to refinance the FRN on the grounds that such a step would entail bringing the payment liability on their books at a time when the issue of non-performing assets (NPAs) is top on the concern list of the financial sector.