Listed firm Bharat Wire Ropes on Tuesday said it was in default of Rs 219.70 crore owed to state-owned banks as on December 31. The company disclosed the default to the stock exchanges following a Securities and Exchange Board of India (Sebi) notification mandating such disclosures.
The default took place on September 30, 2018. Bank of Baroda (BoB) has the largest exposure of Rs 286 crore to Bharat Wire Ropes. The other lenders to the company are Union Bank of India and its UK subsidiary, State Bank of India, Central Bank of India, Corporation Bank and Exim Bank.
In terms of a Sebi circular dated November 21, 2019, the regulator had said that relevant disclosures of defaults on payment of interest/repayment of principal amount on loans from banks/financial institutions should be made in a specified format. Of the default amount, the principal overdue is Rs 144.84 crore, while the interest overdue is Rs 74.86 crore.
The company’s total outstanding borrowings from banks and financial institutions stand at Rs 570.71 crore. The facilities on which it has defaulted include term loans, external commercial borrowings (ECBs) and working-capital loans.
The Reserve Bank of India (RBI) is yet to come up with a framework for resolution of stress in companies where the banking system’s exposure is less than Rs 1,500 crore. The June 7 circular defines the mechanism for resolving larger accounts. In November 2018, CARE Ratings had rated bank loans worth Rs 450 crore taken by Bharat Wire Ropes as ‘D’, or default grade, citing non-cooperation on the part of the borrower. “There have been ongoing delays in servicing of term loans on account of weakened liquidity and cash losses during H1FY19,” CARE said in the rating rationale.