Hind Glass gets 90 days more to settle debt

Hindusthan National Glass & Industries Ltd (HNGIL), the country’s largest container glass maker, has obtained 90 more days time to settle dues with bankers. The company had on August 27 worked out a resolution plan wherein it offered to pay ₹2,006.87 crore as settlement by November 2018.

Sources say HNGIL will pay 85 per cent of its dues by February 22, 2019. Some dues are said to have been cleared within the first 90 days ending November 24.

When BusinessLine contacted Mukul Somany, Vice-Chairman and Managing Director, HNGIL, he directed this correspondent to CFO Bimal Kumar Garodia. But Garodia refused any comment. A subsequent message to Somany went unanswered. The company’s annual report for 2017-18 maintains that its total debt at the end of the fiscal stood at ₹2,524 crore. This means bankers and other lenders of the company have taken a haircut of approximately ₹500 crore as a part of the resolution plan.

Bourse notification

Incidentally, a stock market notification said the lenders had agreed to extend/modify the period of the resolution plan by another 90 days. “Extension of time by 90 days up to 22.02.2019 for payment of balance 85 per cent of amount of resolution plan has been agreed by all lenders,” the December 11 notification said.

It does not specify how the company plans to raise this amount. Lenders of HNGIL include State Bank of India (SBI), EXIM Bank, HDFC Bank, Standard Chartered Bank, Syndicate Bank, DBS Bank, Rabo Bank, Bank of Baroda, Axis Bank, Edelweiss Asset Reconstruction Co, LIC and L&T Finance.

Among the lenders, HSBC did not agree to the terms and conditions of a corrective action plan, and later assigned all rights, title and interest in financial assistance in favour of Edelweiss Asset Reconstruction Co.

Loan default

HNGIL, it may be mentioned, has been incurring losses since FY13 that resulted in reduction of its net worth. Due to depressed market demand and poor financial performance, lenders restructured term loans in December 2014. Stipulations such as moratorium in repayment of instalments, infusion of equity by the promoters in various periods and fresh valuation of its assets, were also laid. No to much avail.

From November 2017 to September 2018, the company defaulted on repayment of ₹420 crore including principal, interest and penal interest and unpaid letter of credit. Due to the financial crunch, the company has said that it is unable to pay interest of 10.40 per cent on ₹100 crore worth of non-convertible debentures that fell due on November 23.

The auditors, in their report on November 14, also pointed out that the realisable value of assets is lower than the amount payable to secured creditors.