Bhushan Steel Ltd (BSL) has received lenders’ approval for long-term restructuring of about Rs 30,000 crore loans under a scheme of Reserve Bank of India.
The Joint Lenders Forum (JLF) has agreed to extend the loans of BSL for a tenure of 25 years under the RBI’s scheme for long-term structuring of loans in line with cash flows.
“About 70 per cent of the lenders have approved the scheme and by the end of this month it should get closed”, Bhushan Steel Chief Finance Officer (CFO) Nittin Johari told PTI.
Johari said, “The sanction from few banks are awaited and as soon as the nod is given the plan will begin.”
“We have a four-year moratorium on principal repayment. After this, there will be a 21-year repayment period, with a provision to refinance every five years,” he added.
A consortium of bankers led by Punjab National Bank (PNB) has a total exposure of about Rs 30,000 crore in the company.
Besides PNB, the other banks include State Bank of India, Canara Bank, Bank of India and Dena Bank.
An extension of maturity will help the banks in making lower provision for the loan given to the debt-ridden steel manufacturer.
On being asked about the plans to hive off and sell non-core assets to reduce debt, Johari said the company has agreed on sale and leaseback of its oxygen plant in Odisha and further decision would be taken as and when required.
In August last year, Bhushan Steel Vice Chairman and Managing Director Neeraj Singhal was arrested by the CBI in an alleged cash-for-loan scam involving the then Syndicate Bank CMD S K Jain, who was later suspended by the government.
After the arrest, lenders formed a committee with officials from various banks, which are closely monitoring the functioning of the company. They had also appointed some new directors to the company’s board.
Meanwhile, Bhushan Steel promoter Aishwarya Singhal has pledged a little over 17 lakh shares in the company.
The Delhi-based firm’s net loss had widened to Rs 360.77 crore during the fourth quarter of the last fiscal.
For the entire 2014-15 fiscal, Bhushan Steel’s standalone net loss stood at Rs 1,253.83 crore as against a net profit of Rs 61.96 crore in 2013-14.
Shares of Bhushan Steel closed at Rs 55 apiece on BSE, down 2.40 percent from yesterday’s close.
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