Bombay Rayon's Rs 4k-cr case to be taken up by corporate debt restructuring cell

Written by Aftab Ahmed | Vishwanath Nair | Mumbai | Updated: Jul 23 2013, 18:47pm hrs
Bombay RayonAccording to bankers, the 27-year-old Bombay Rayon has been suffering from temporary liquidity issues owing to large number of investments it made in Maharashtra to take advantage of the interest subsidy being offered by the state government. Reuters
Banks are likely to admit R4,000 crore debt of Bombay Rayon Fashions to the corporate debt restructuring (CDR) cell this week. The 23 bank consortium to the textile company is being led by State Bank of India.

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Large lenders in the consortium have been supportive of the company and Bombay Rayon also has plenty of assets in Maharashtra. So it is possible that it will be admitted to the CDR cell, said a banker.

According to bankers, the 27-year-old Bombay Rayon has been suffering from temporary liquidity issues owing to large number of investments it made in Maharashtra to take advantage of the interest subsidy being offered by the state government. Other lenders include Bank of India, Bank of Maharashtra, Corporation Bank, Dena Bank, Exim Bank, Punjab National Bank, Axis Bank, ICICI Bank, Citibank and Standard Chartered Bank.

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On Monday, Bombay Rayon shares ended at Rs 217 on BSE, down 1.77% from the previous close. The company, on Friday, had put a notice on BSE stating its board approval to the proposal for the CDR cell.

The Janardan Agrawal-promoted company had reported Rs 896.55 crore net revenue for the quarter ended March 31, up 12.6% from a year ago. Net profit rose 16.4% year-on-year to Rs 48.36 crore in the January-March quarter.

Banks have seen a large pipeline of borrowers seeking to restructure their debt over the past year. Between April 2012 and March 2013, loans worth Rs 76,479 crore were recast by the CDR cell. As on June 2013, the cumulative number of restructured loans crossed Rs 2.5 lakh crore according to bankers.