The consortium of lenders, which had approved a Corporate Debt Restructure package for IVRCL, has decided to exit the CDR mechanism.

The Hyderabad-based construction and infrastructure company received a communication from the Corporate Debt Restructuring Cell informing that the lenders have decided to exit the CDR mechanism, which was extended to the company to facilitate its turnaround, by bringing down the interest rate and extending moratorium on loans.

Some 20 banks, led by SBI, have extended loans to the company. Subsequently, the lenders had also invoked the provision of the strategic debt restructure. They converted some of the debt into equity to pave the way for divestment of some of the matured assets to ease the company’s debt burden.

The decision to back out from the debt restructure comes after the CDR empowered group held a meeting with the lenders. The empowered group approved the exit of the lenders from the CDR package.

According to a regulatory filing made to the BSE, the lenders attributed this to the failure of the CDR mechanism. The woes of the company continue to mount after an under-construction flyover in Kolkata collapsed last year leading to the death of 27 people.

Earlier this year, the long-pending proposal of the Tata group entity Tata Realty & Infrastructure Ltd, which had struck a deal with IVRCL to buythree of its tollways failed and the company decided to back out. This further added to the woes of IVRCL.

As of August, the company had accumulated losses of ₹2,428 crore, its net worth had been eroded and the aggregate loans totalled ₹5,493 crore, with ₹1,915 crore falling due for payment over the next 12 months.

The company is battling several winding up petitions.

While the company managed to divest a couple of projects, including the Chennai desalination plant, its efforts to divest some of the tollways have not met with success, stressing its already stretched finances.

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