ABG Shipyard shareholders reject lenders' proposal to invoke SDR

Lenders had proposed conversion of loans worth Rs 16,397 crore into equity

Shareholders of debt-laden ABG Shipyard on Wednesday rejected its lenders' proposal to invoke strategic debt restructuring (SDR) in the company.

The special resolution put forth to shareholders mentioned issuance of equity shares to corporate debt restructuring (CDR) lenders on conversion of the latter's outstanding loans to the company as part of the SDR scheme.

The 22 lenders consortium---led by ICICI Bank-- had proposed acquisition by converting 51 percent of the Rs 16,397 crore debt into equity which will allow them to take control of the company's management.

ABG Shipyard's CDR was approved in March 2014. The company has been struggling to have resolve the debt issue but has not been able to make much progress with business climate remaining grim leading to drying topline.