Lenders of IVRCL clear SDR
The lenders of debt-ridden infrastructure firm IVRCL Ltd have finally concluded to convert part of their loans to the company into a 51 per cent or more equity holding.
Hyderabad: The lenders of debt-ridden infrastructure firm IVRCL Ltd have finally concluded to convert part of their loans to the company into a 51 per cent or more equity holding.
The joint lenders forum (JLF) in a meeting has approved the strategic debt restructuring (SDR) in the company, it said. In a mandatory filing the company said, State Bank of India acting on behalf of the lenders has informed that the JLF had approved the SDR conversion and lenders will convert part of the debt into equity.
Accordingly, the SDR will be done in tranches at the price of Rs 8.765 per equity share of face value of Rs 2 each, the report added. Collectively, the lenders together will hold 51 per cent or more in the company, as per the provisions of Sebi, it said.
The loans and advances by the company to its subsidiaries stood at Rs 434 crore on December 31, 2015 while the losses for nine months ending December 31, 2015 stood at Rs 796.49 crore.
RBI’s SDR provision allows banks to take over the management of a firm after converting debt into equity in cases where debt restructuring has failed or is near failure. Thus banks can hold the equity for 18 months and, in the interim, sell assets or look for a new management for the company.
Creditors had earlier appointed EY, the global consulting firm formerly known as Ernst & Young, to advise on SDR transaction. In July 2014, a consortium of 20 banks had approved a debt revamp package.
The company is a diversified group with presence in sectors like water & environment, irrigation, transportation, building & industrial structures, power distribution and transmission, operations and maintenance and mining.