Essel Infraprojects and Shriram EPC, both eyeing a stake in Jyoti Structures, are expected to submit their bids soon, senior bankers told FE. A group of 21 banks led by State Bank of India (SBI) has been looking to sell a majority 51% in the loss-making company and has mandated SBI Capital Markets (SBI Caps) to look for a buyer. Jyoti Structures’ market capitalisation as on Wednesday stood at R99.23 crore. It is not immediately known at what valuation banks would be willing to part with the shares. According to Bloomberg, the enterprise value of the company is currently R3,092 crore, thereby imparting a 51% stake a value of R1,576 crore.
Essel Infraprojects, Shriram EPC and Jyoti Structures did not reply to emails seeking comments till the time of going to press.
Jyoti Structure’s gross debt stood at R6,917 crore (including interest overdue) at the end of March 2016. In 2015-16, the firm reported a net loss of R502 crore on revenues of R2,495 crore; interest expenses rose 51% to R556 crore. In Q3FY17, it reported a net loss of R281 crore owing to R197 crore in interest costs.
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A senior banker told FE the strategic debt restructuring (SDR) scheme for the company failed since lenders were unable to convert debt into equity within the stipulated time of 210 days.
Lenders to the company had decided to convert loans into shares at a value of Rs 26.90 apiece. Jyoti Structures’ debt was restructured by a joint lenders’ forum ) in September 2014.
The company is promoted by KR Thakur (3.34%), Prakash K Thakur (4.51%) and Surya India Fingrowth (5.35%). Other major shareholders include UTI Infrastructure (3.24%), HDFC Trustee Company (7.34%), Yes Bank (4.03%) and LIC Market Plus 1 Growth Fund (1.07%).
“While KEC International and Dubai-based Amin Group had shown interest in acquiring a stake in the company, the talks have not materialised,” a banker with a Mumbai-based lender said.
Credit Suisse said in a recent report that in addition to the 9.5% gross non-performing assets, banks have, around 4-8% of loans are classified as standard but have been restructured or are SDR cases. As the forbearance for these loans expires over the next 12-18 months, addition to corporate non-performing assets will continue.