Ritu Jindal, NDTV, 24 Mar 2012 | 07:55 AM
Indian industry seems to be facing a crisis of repayments, if the growth in quantum of debt being sought to be restructured is any indication. Burgeoning interest costs, input prices and slowing growth have led to excess capacity additions, which continue to pose cash flow problems for the corporate sector.
The latest additions to the list of companies seeking debt recast are Electrotherm India and Jai Balaji, which are looking to restructure debt totaling over Rs 5000 crore.
According to banking sources, lenders have referred over Rs 3000 cr debt of Electrotherm India, a metal engineering company, for CDR. Lenders have also have also proposed to restructure Rs 2200 cr debt of Jai Balaji via CDR. Both companies are seeking to extend their repayment period of loans along with a reduction in interest rates.
With more and more corporates choosing this option, the Corporate Debt Restructuring (CDR) cell is now looking at over Rs 75,000 crore of corporate debt to be restructured in fiscal 2012, more than three times the Rs 25,000 crore in fiscal 2011, data from the CDR cell shows.
Most restructuring requests have come from iron and steel, road, telecom, and textile sectors. Noteable among these are companies like the GTL Group, Hotel Leela Ventures, Moser Baer and HCC. Banks have also restructured large scale state electricity board & aviation sector loans which have been outside of the CDR mechanism.
DEBT RESTRUCTURING TO CONTINUE RISING
