By Shamik Paul
The consortium of bankers to IVRCL may consider starting bankruptcy proceedings against the Hyderabad-based infrastructure and engineering, procurement and construction company under the Insolvency and Bankruptcy Code 2016 (IBC), sources close to the development told FE. IVRCL, which operates in sectors such as irrigation, transportation, building & industrial structures, power distribution & transmission, mining and operations and maintenance, has an outstanding debt of Rs 7,121.93 crore as on March 31, 2017, according to Bloomberg data. However, company sources said they have not received any official communication regarding the matter from the bankers. The issue was discussed at a recent meeting with the bankers and they may consider referring the company to the National Company Law Tribunal (NCLT) soon, sources added.
“We may consider taking IVRCL to the NCLT since we have not been able to agree on a resolution plan,” a senior banker with a large public-sector lender said on condition of anonymity. SBI is the lead banker in the consortium of bankers. Other banks in the consortium include IDBI Bank, Canara Bank and Union Bank. In 2016, IVRCL had allocated equity shares to its lenders under the strategic debt restructuring (SDR) scheme. Banks and financial institutions hold a 55.88% equity stake in the company. SBI holds 6.31% stake, while IDBI holds 6.75% stake. Private-sector lender ICICI Bank holds an 8.02% stake.
The consortium of lenders, who had earlier approved a corporate debt restructuring (CDR) package to IVRCL, exited the CDR mechanism last month. In a stock exchange notification on October 23, IVRCL said, “The company has received communication from the CDR cell that the CDR Empowered Group after due deliberations with the lenders approved the exit of the account of the company from CDR mechanism on account of the failure of the CDR package.” In July 2014, the CDR cell had approved a Rs 7,000-crore debt recast proposal of IVRCL that reduced the interest rate on the company’s debt and gave more time to the company to repay its debt.
IVRCL posted a net loss of Rs 576.89 crore on revenues of Rs 2,589.20 crore for the financial year ended March 31, 2017. Another source with direct knowledge of the development said the banks are understood to be in the process of scouting for an interim resolution professional (IRP) which they may recommend to the NCLT. Once the case is admitted by the NCLT, it will appoint an IRP who will take over the management of the company till a resolution is reached. IVRCL was mentioned in the second list of corporate defaulters that the Reserve Bank of India had sent to the banks in August. Shares of the company closed at `4.30 on Wednesday, unchanged from the previous close.