A consortium of 23 banks has approved a R3,896-crore corporate debt restructuring package of highway developer Soma Enterprises, three bankers familiar with the matter told FE. The case of the second company of the Ankineedu Maganti-owned group Soma-Isolux, which has also been referred to the cell for restructuring of R2,238 crore, is still under discussion, bankers said.
?One of the big accounts that was cleared at the last CDR meeting was Soma Enterprise,? a public sector bank executive who was present in the meeting told FE.
The empowered group of corporate debt restructuring (CDR) cell has formally okayed a package that includes a two-year moratorium on principal and term-debt interest payments and a 3-4% reduction in interest rates, according to another banker. Under RBI?s restructuring norms, promoters? sacrifice and additional funds brought by them should be minimum of 20 % of banks? sacrifice or 2% of restructured debt, whichever is higher.
As many as 23 banks, including UCO Bank, Axis Bank, Andhra Bank, L&T Infrastructure Finance and ING Vysya Bank, have lent to the company. Bankers said the company had been facing liquidity stress due to delay in payments for contract work.
Soma suffered as payments were delayed and working capital cycles got extended, which brought liquidity crunch to the company.
The company has been in the business of highway development and had earlier raised funds through private equity investments. The UK-based 3i Private Equity, which had an infrastructure fund, had invested $101 million (R560 crore) to pick up a minority stake in Soma in November 2007. In 2011, the company saw another round of PE funding from JPMorgan Asset Management, which invested $110 million.
A list compiled by FE based on data from CDR cell shows at least 8 PE-backed projects that are currently under consideration at the CDR cell. The most recent of these cases is Coastal Projects ? backed by Baring PE Asia, Sequoia Capital and Fidelity Capital Partners ? which was referred to the CDR cell this month for the recast of R3,575 crore in debt.
In the April-June period, 28 cases worth R39,521 crore were referred for restructuring, while in second quarter, the amount came down to a little over R26,000 crore.
