McNally Bharat Engineering Ltd (MBEL), the stressed engineering company of the Williamson Magor Group (WMG), is close to roping in an Iceland-based strategic investor to tide over the ongoing financial crisis in the company which it believes will be addressed by the end of the current fiscal.
Banking sources told ET that ANGCC Capital Management EHF, a member of the ANGCC Global Investment consortium having its registered office at Reykjavik, Iceland, has submitted the final binding term sheet after incorporating majority of the conditions of the lenders including that of the banks.
The lenders are currently evaluating the final binding offer and expect to take a final call before end-March 2020 so that the banks can comply with their provisioning norms as per central bank norms, the source said on condition of anonymity.
The same investor is also working out the resolution plan of McNally Sayaji, a subsidiary of McNally Bharat, which will solve the problem of the entire infrastructure wing of the Williamson Magor group, the person said.
Confirming this, MBEL’s CFO Manoj Digga said the company has proposed the resolution plan to its lenders outside the purview of the National Company Law Tribunal (NCLT). The company currently has fund based debt of around Rs. 2,000 crore and non-fund based debt of around Rs. 1,100 crore.
ANGCC Capital Management EHF’s binding offer will see infusion of funds in MBEL. The move is expected to dilute the promoters’ holding, which stood at 43.53 % on September 2019. “We hope to complete the whole process including roping in of a strategic investor and the subsequent, debt-restructuring by end March 2020,” Digga said.
The banking source as well Digga refused to give details of the binding offer.
While MBEL is working to reduce debt and vying for a recast, it has simultaneously roped in Turkey-based Kalyon Insatt Sanayi ve Ticaret as a collaborator to bid for infrastructure projects and thereby improve its financials by end FY21.
The current order book of MBEL stands at Rs 1,000-1,200 crore, spread among the power, steel, water and construction sectors. The company clocked a turnover of Rs 127 crore and a negative ebitda of Rs 146 crore in the quarter ended December, compared to the topline of Rs 154 crore and a negative ebitda of Rs 26 crore in the last quarter. The loss is higher in this quarter due to write-offs of unrealisable debtors and claims receivables, Digga said.
