After picking up the majority of Bharati Shipyard’s debt from the company’s lenders last year, Edelweiss Asset Reconstruction Company (ARC) now plans to restructure around Rs 4,500 crore through the joint lenders’ forum (JLF). This is in line with a directive from the Bombay High Court that has asked the ARC to submit a financial restructuring plan within the next 60 days. The plan includes infusing R600 crore into the company.
Confirming the development, Siby Antony, MD & CEO, Edelweiss ARC, told FE that at the last hearing
of the ARC’s plea against the winding-up petitions against the company, the HC had asked it to come up with a restructuring plan. “We are evaluating the level of debt that could be restructured and we have two months to decide,” Antony said. He added that Edelweiss ARC is looking to aggregate the remaining debt from other lenders. “Once the entire debt moves to us, restructuring the loan will be easier,” Antony explained.
FE had earlier reported that public sector lender Punjab National Bank has offered loans of Rs 482 crore to Bharati Shipyard for sale to ARCs.
An email seeking comments from Bharati Shipyard remained unanswered.
The corporate debt restructuring (CDR) package of Bharati Shipyard had failed in the first quarter of FY15, following which a consortium of lenders led by State Bank of India sold its loans to Edelweiss ARC in July. Eleven lenders out of 23 had sold their debt amounting to Rs 4,200 crore. Bharati’s debt was referred to the CDR cell in December 2011 and lenders agreed to recast the company’s loans in April 2012 and had offered them a moratorium on interest for 18 months and a reduced interest rate of 11%.
Worried that its attempts to recovery money from Bharti Shipyard may be jeopardised, Edelweiss ARC had in May appealed against a recent Bombay High Court ruling that allowed bilateral settlements between the company and its unsecured creditors.
Nine unsecured lenders had filed separate winding-up petitions against Bharti Shipyard and the court had directed the company settle claims bilaterally. In its order dated March 10, the court observed that Bharti Shipyard had agreed to pay Rs 30.6 lakh to one of the petitioners and that the petitioner has agreed to accept the offer. It also said in the event the company defaults, the winding-up petition shall be revived without “reference to this court”.
In Q4FY15, the Mumbai-based company posted a net loss of Rs 540 crore on the back of Rs 12.1 crore in revenues owing to a hefty Rs 69.6-crore interest outgo in the quarter. In FY14, it reported a net debt of Rs 5,393 crore. The company is promoted by managing directors Vijay Kumar and Prakash Chandra Kapoor, who hold 11.38% each in the company, and by Bharti Infratech Projects with a 32% stake.