Binani debt revamp okayed

The corporate debt restructuring cell comprising senior executives of banks and financial institutions has cleared a restructuring package for Binani Industries' Rs 270 crore debt.

The consortium of lenders, led by the Industrial Development Bank of India, recently gave their nod to the scheme.

As per the recommendations of the CDR cell, the entire bank debt of Rs 150 crore of Binani Industries will be transferred to Binani Zinc, a subsidiary that is being incorporated. The remaining debt would remain with Binani Industries.

Further, the average interest cost will decline to around 11 to 12.5 per cent from the existing 13.5 per cent to 17 per cent. The repayment schedule for the debt has also been stretched to around 10 years, sources said.

The spokesperson of Binani declined to comment on this issue. According to the institutional sources, the restructuring is aimed at making Binani Zinc attractive to strategic investments keeping in mind the rising zinc prices.

A source close to the development said: "Globally, zinc prices have been on an upward trend and the industry is all set for a future push in demand as well as prices. Improved margins in the zinc business could assist the promoters of Binani to bring in a strategic investor and use this money to repay the debt of the company."

Sources also said that after the implementation of the CDR package Binani Industries will now in effect become the holding company for all the other companies - Binani Zinc, Binani Cement, Goa Fibre Glass, Binani Composites and Binani Lead.