Agency reports indicate that the CDR (corporate debt restructuring) cell refused to consider the CDR request of Electrosteel Steels for its Rs 7,000-crore loan.
This is because the company did not adhere to the terms of the proposal, including fresh capital infusion and corporate guarantee that promoters are supposed to bring to the table. Therefore, the consortium of 27 banks delayed the plan to recast the loan.
Electrosteel is a manufacturer of ductile iron (DI) pipes and casting and it was promoted by the Kejriwal family.
Punjab National Bank lent around Rs 400 crore, Srei Infra about Rs 440 crore, Indian Overseas Bank (around Rs 350 crore), and Oriental Bank of Commerce and Uco Bank lent over Rs 300 crore each to the company.
With over Rs 1,000-crore exposure to the troubled Kolkata-based company, State Bank of India is the leader of the consortium.
The group flagship Electrosteel Castings is the holding company of Electrosteel Steels with 39 per cent stake, and bankers want guarantees from this firm for CDR to go through.
It is learnt from sources that the promoters of the firm are not keen on providing corporate guarantees but are ready to offer personal guarantees. Bankers also say that for the CDR to be completed, the company must infuse around Rs 300 crore of fresh capital.
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