Lenders led by State Bank of India to ailing Jain Irrigation Systems Ltd (JISL) have completed restructuring of debt worth Rs 3,878 crore. The debt recast covered aspect like converting about 40 per cent of the total debt into long term non-convertible debentures at an interest rate of 0.01 per cent.
On completion of this debt restructuring, normalcy has been restored to the accounts and all past irregularities and defaults stand cured, JISL informed the BSE.
The restructuring proposal was approved in the Joint Lenders Meeting on March 29, 2022 after fulfilling all conditions. The Master Restructuring Agreement (MRA) was signed on February 10, 2022.
The Debt Resolution was invoked on June 30, 2019 after a series of consultations with lenders. It was triggered due to certain delays in debt servicing, induced by extended working capital cycles due to delay in receipts from governments.
JISL said the recast was done under Prudential Framework for Resolution of Stressed Assets issued by Reserve Bank of India on June 7, 2019. The plan has received RP4 rating, indicating viability, from ICRA and CRISIL.
Under plan, the promoters and other investors have to inject equity of Rs 267 crore. About 40 per cent of money has been already infused and balance amount is expected to be brought in over the period of 18 months. Lenders would get 78.9 million equity shares.
The company has also restructured overseas bonds worth $200 million.
Going forward, the company can access additional working capital facilities of about Rs 300 crore. The debt recast will significantly reduce interest cost, defer payments to the lenders. It is expected to improve fund flow for business and also overall improvement in the operations and performance, it added.
Anil Jain, Managing Director and Chief executive, JISL, said the demand environment for the core business of Micro Irrigation Systems and Plastic Pipes is very robust. The company is confident to regain and increase market share in future.
Source: Business-Standard