The Corporate Debt Restructuring Empowered Group of the Reserve Bank of India, at its meeting held recently, approved the debt recast proposal submitted by IVRCL.

The restructured package covers ₹7,350 crore. About 20 banks led by State Bank of India were involved in the restructure process, R Balarami Reddy, Chief Financial Officer, IVRCL, told BusinessLine .

Under CDR, banks typically increase the repayment period of loans to stressed borrowers, offer a moratorium and reduce lending rates.

The board of directors of the Hyderabad-based construction and infrastructure company, in its meeting held on Monday, passed necessary resolutions for the implementation of the corporate debt restructuring scheme.

“This is a significant development and comes in as a big relief. This will enable us to take off again by implementing various projects which were stuck due to funding issues. We have a strong order book of ₹20,000 crore and will implement them as per plans,” Reddy said.

Explaining the terms, he said the company will have access to a priority debt of ₹175 crore, additional cash credit of ₹200 crore, ₹1,400 crore non-fund credit and ₹300 crore of letter of credit. All of them will be interest-free from December 1, 2013, and have a moratorium of 28 months on term loans.

The funded interest term loan is to be paid within eight years after the moratorium. It will carry an interest rate of 11.25 per cent. The company’s interest burden had piled up and the cash flows were impacted due to slowdown in project execution. IVRCL was, therefore, forced to knock at the CDR cell.

IVRCL had divested its stakes in three road projects in Tamil Nadu to a Tata group company Tata Realty and Infrastructure Ltd, and is in negotiations to divest stake in a couple of other projects, including a Chennai desalination plant and road projects.

IVRCL shares closed at ₹26.5, marginally down on the BSE on Tuesday.

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