The Corporate Debt Restructuring (CDR) Cell was kept busy in the last quarter of FY2011, with seven Andhra Pradesh-based microfinance institutions getting admitted for restructuring.

In the last quarter alone, 20 corporate debt restructuring cases with an aggregate debt of Rs 15,247 crore were admitted to the CDR Cell. The cell was jointly floated by banks and financial institutions in 2001 to restructure debts of viable corporate entities affected by internal and external factors.

In FY2011, 47 (31 in FY2010) corporate debt restructuring cases with an aggregate debt of Rs 25,054 crore (Rs 22,274 crore in FY2010) were admitted to the CDR cell.

The seven MFIs that were admitted to the CDR were: Spandana Sphoorthy Financial Ltd (Rs 3326 crore); SKS Microfinance Ltd (Rs 3044 crore); Share Microfin Ltd (2402 crore); Asmitha Microfin Ltd (Rs 1374 crore); Bharatiya Smruddhi Finance Ltd (Rs 1263 crore); Future Financial Services Ltd (Rs 159 crore); and Trident Microfin Pvt Ltd (Rs 149 crore).

The seven MFIs are finding the operating environment in AP tough as the State Government passed a law late last year, restraining their functioning. The State passed the law following reports of some MFIs resorting to strong-arm recovery tactics and usurious interest rates being charged from poor borrowers.

In FY11, some of the big corporate debt restructuring cases that were admitted to the cell include: Ramsarup Industries (Rs 1,797 crore); Murli Industries (Rs 1,177 crore); Biotor Industries Ltd (Rs 986 crore); Ankur Drugs & Pharma (Rs 982 crore); 'Tebma Shipyard (Rs 693 crore); and Koutons Retail India (Rs 662 crore).

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