IDBI officials were not available due to the ensuing board meeting scheduled early next week in New Delhi. However, other institutional sources confirmed the development.
Institutional sources told FE, IDBI has already appointed SBI Caps to prepare a blue print for restructuring and spotting a strategic partner. SBI Caps is expected to complete its job within 60 days. Thus to avoid duplication, IDBI thought it fit to continue with this exercise instead of allowing SPGL to do it separately.
SPGL, which is currently managed by the IDBI-led lenders with the recently appointed managing director A Krishna Rao, at its recent board meeting had passed a resolution relating to the financial restructuring. As reported by FE, the board had set up a two-member committee comprising Industrial Finance Corporation of India (IFCI) nominee RK Chavali and Rolls-Royce representative VR Mehta. However, the board had called for seeking the approval of IDBI for being a consortium leader for the proposed financial restructuring.
The company had proposed such a restructuring in view of the high cost debt of Rs 866.98 crore as on March 31, 2003 compared with Rs 796.44 crore as on March 31, 2002. The debt has been risen to this level despite covering interest and principal in the fixed cost.
The list of institutions with their exposure is as follows IDBI (Rs 127.8 crore), IFCI (Rs 79 crore), ICICI Bank (Rs 90.3 crore), State Bank of India (Rs 100 crore), ANZ Grindlays (Rs 238.4 crore), LIC, UTI and others (Rs 50 crore).
As per the power purchase agreement, SPGLs debt should not have crossed Rs 265 crore. Assuming the Spectrum plant (208 mw) is running at 90% plant load factor, the return on equity plus incentives have been estimated at Rs 64.88 crore.
SPGL had already invited offers from the merchant bankers to suggest financial restructuring. It had proposed to reduce interest rate which ranges between 18.5% to 21% and it was also looking for reschedulement of repayment.