Lenders of GTL Infrastructure are looking at selling Rs 4,000-crore loans of the stressed company on a consortium basis – a move that will enable them to derive the best deal from asset reconstruction companies, said two senior officials who did not want to be named.
Senior officials said that Union Bank of IndiaNSE -1.84 %, which is the lead bank in the consortium, has received mandate for all the member banks to jointly sell the loans of the company which will could result in lower haircut and equity upside if they manage to revive it.
GTL Infrastructure would be classified as non-performing loan for most banks for the March quarter after the Reserve Bank of India decided to do away with all the debt restructuring schemes in February 2018.
Lenders had lent around Rs 8,000 crore in the company which was reduced to half after they initiated strategic debt restructuring scheme. The scheme, which is now discontinued, allows banks to convert part of loan into equity of the companies that are facing financial stress and at the same time allows banks to retain the account as a standard for 18 months provided conversion happens while the account is standard account.
Banks had to sell their stake to new promoters within 18 months.
On conversion of debt lenders holding stood 65% of equity stake, promoter Manoj Tirodkar held 19.5% while balance equity stake is with public.
“For lenders, the clock has started ticking from March 1 and if a resolution is not in within 180 days banks will have to refer to bankruptcy court,” said a senior person quoted above. Lenders, have in the past, sold two loans on consortium basis-Bharati Defence (earlier known as Bharati Shipyard) Shipyard and Hotel Leelaventure.
A similar attempt is being made to get best price for the loan and also enable quick recovery. Very often the aggregation of the loan itself takes over one year leaving little scope to revive the company while it is a going concern.
A number of lenders have to classify the loan as non-performing loan since they were unable to find a buyer for their 65% equity stake in the company.
“An attempt to sell the loan in consortium will help us bargain a better deal. The idea was discussed among lenders in the last week on March but it was not been conclusive since some south based banks were seeking clarification on the process of selling loan in a consortium,” said senior officials quoted above.
Source: Economic Times