In a major blow to Lanco Infratech Ltd, nine lenders have turned down the company’s proposal to restructure its Rs 7,000-crore debt.

“Nine out of 27 banks, including Andhra Bank, Punjab National Bank and Punjab & Sind Bank, have expressed their inability to support the corporate debt restructuring (CDR) proposal at a meeting onNovember 14,” a banking industry source told Business Line .

It is the first time the company has opted for a CDR. It had a debt of more than Rs 30,000 crore as on September 30 and had sought re-cast of more than Rs 7,000 crore and fresh working capital support of Rs 3,500 crore.

Under CDR, banks typically increase the repayment period of loans extended to stressed borrowers, offer a moratorium and reduce lending rates. For a debt re-structuring to go through, at least 60 per cent of the lenders in terms of numbers and 75 per cent in value terms should back the proposal.

In the Lanco Infratech case, nearly 30 per cent (in value terms) were not in favour of the CDR proposal, it is learnt.

That Andhra Bank does not have a CMD has also compounded the problem.

But bankers familiar with the development think all is not lost for the ailing infrastructure company. Lenders like Punjab & Sind Bank may re-examine their stance and can change their views before the next meeting slated for December 11. Still, it will still be a close call for Lanco.

The company did not respond to queries sent by Business Line on the CDR discussions.

Scrip hit

The company’s stock has lost more than 50 per cent of its value in the past 12 months. The scrip fell 3.17 per cent to Rs 5.81 on the BSE on Tuesday. Most brokerage firms have categorised Lanco as an under-performer and recommended selling the stock.