Banks have exposure of Rs 7,900 cr
Subsidiaries of the State Bank of India (SBI) have put their loans to companies of the Abhijeet Group on sale to asset reconstruction companies (ARCs), people familiar with the development told FE. Although the total assets up for sale could not be immediately ascertained, lenders said these companies owed banks R7,900 crore.
“Some banks had approached us earlier and now SBI subsidiaries have also reached out to us,” an executive at a Mumbai-based ARC said.
These include State Bank of Travancore (SBT), State Bank of Hyderabad (SBH) and State Bank of Mysore (SBM). While the total borrowings of Abhijeet MADC are R1,139 crore, Abhijeet Projects has loans of R400 crore, Corporate Ispat Alloys R1,652 crore and Corporate Powerowes banks R4,712 crore.
The Manoj Jayaswal-led Abhijeet Group is allegedly among the biggest beneficiaries of the controversial coal block allotments, as part of which the company got blocks in Jharkhand and Chhattisgarh. The group has been struggling to generate enough cashflow and repay its dues, bankers told FE.
Last year, the group had sought a recast of dues under the corporate debt restructuring (CDR) scheme for its companies, Corporate Ispat and Corporate Power. However, these were put on hold after the company failed to rope in a new investor by December 2013.
Based in Nagpur, the group is a diversified business entity with a presence in the core sector areas of power, roads, mining, EPC, ferroalloys, steel and cement. These companies belonging to Abhijeet Group are not listed on the stock exchanges.
According to documents available on the ministry of corporate affairs’ website, Corporate Ispat suffered a loss of R65.7 crore in FY13 on the back of R249.5-crore revenues in the same period. This is the latest available record of the company’s performance. In the same period, revenues from operations decreased 20.9.% and the company attributed it to decrease in revenue of project consultancy segment and an unfavourable market for ferro alloys industry.
The consortium of 21 banks, which has exposure to Corporate Ispat is led by State Bank of India; other lenders include Bank of India, Union Bank of India, UCO Bank and Central Bank of India. An email sent to the company seeking comments remained unanswered.