Sources say that Hyderabad-based Infrastructure company Soma Enterprise, which has a debt burden of around Rs 5,000 crore, is heading for corporate debt restructuring (CDR). The highway developer, which also has an engineering, procurement and construction (EPC) division, has been referred to the CDR cell by one of its bankers, State Bank of India, the countryÂ’s largest lender.
A senior public sector executive said the company was facing liquidity stress due to delays in payments for Contract Work. Under CDR, banks typically increase the repayment period of loans to stressed borrowers, offer a moratorium and reduce lending rates. As many as 23 banks, including UCO Bank, Axis Bank, Andhra Bank, L&T Infrastructure Finance and ING Vysya Bank, have lent to the company.
The company had an EPC order book of Rs 16,170 crore as on March 31, 2012. Soma is one of the many infrastructure companies facing liquidity crisis. Especially, EPC companies have come under pressure as orders reduced, payments are delayed and working capital cycles got extended, forcing these companies to borrow more on the short term as well. Apart from EPC, the company develops road projects on the BOT basis.
It has completed the construction of four such projects and four more are under way, according to the company website. Soma is engaged in the construction of infrastructure projects across sectors like hydel power, irrigation, transportation, and transmission lines, in addition to urban infrastructure and real estate.
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