Lenders have cleared the debt-recast proposal of New Delhi-based infrastructure-development company BL Kashyap and Sons (BLK), the company said in a regulatory filing on Monday. Bankers told FE that the package was worth R750 crore and was led by the State Bank of India.
The firm’s consolidated net debt stood at R669 crore at the end of March 2014, up from R623.7 crore a year ago, Bloomberg data showed. For the three months to September 2014, BKL reported a loss of R10.46 crore on the back of R186.2 crore in revenue.
Its interest expenses were at R 21.9 crore in Q2FY15 and it reported an operating loss of R1.15 crore owing to higher operating expenses at R189.3 crore. “BL Kashyap and Sons has informed BSE that the proposal of the company regarding the restructuring of its debt has been approved by the empowered group of corporate debt-restructuring (CDR) cell and communicated vide its provisional letter of approval dated December 31, 2014,” it said in a BSE filing.
Reacting to the announcement, its shares jumped almost 15% intraday and closed at R16.15 on Monday, up 6.6% from its previous close on BSE.
The statement added that the company was in the process of executing the master-restructuring agreement (MRA) with CDR lenders. According to the company’s FY14 annual report, its main bankers are State Bank of India (SBI), Canara Bank, IndusInd Bank, Oriental Bank of Commerce (OBC), ICICI Bank, Standard Chartered Bank and Yes Bank.
According to the company’s website, BLK is into construction and infrastructure development with a service portfolio extending across the construction of factories and manufacturing facilities, IT campuses, commercial & residential complexes, malls and hotels.
The company is promoted by the Kashyap family with Vinod Kashyap as its chairman and Vineet Kashyap as its managing director. As on September 30, 2014, the promoters held 71.25% stake in the company. Public shareholding was 28.75%.
After restructuring more than R1-lakh-crore debt in FY14, the CDR cell, a forum of bankers that takes a call on individual debt recast packages, has seen fewer referrals after the Reserve Bank of India (RBI) introduced the norms for joint lenders’ forums (JLFs).
The RBI, in December last year, had published guidelines for early detection of stressed assets which said that if the JLF decides on restructuring the account as a CAP, it will refer the account to CDR cell for restructuring after preliminary viability study.
Meanwhile, the CDR cell restructured R40,850 crore of corporate loans in the first eight months of FY15, showing that though joint lender forums are preempting stress in accounts, approvals have not yet bottomed out. Corporate debt restructuring is a mechanism that works on the principle of approvals by super-majority of 75% creditors (by value) which makes it binding on the remaining 25% to agree to the majority decision and covers only multiple banking accounts and consortium accounts with exposure of R10 crore and above.