Pennar board okays revised financial revamp plan

The Corporate Debt Restructuring (CDR) cell has cleared the revised financial restructuring scheme of city-based Pennar Industries Limited. The approved CDR package will see the paid-up equity written down by 50 per cent.

Under the new package, the amount of reduced equity will be converted to 0.01 per cent cumulative redeemable preference share repayable between 2013-14 and 2015-16.

The CDR proposal has been accepted by the board of directors of Pennar. The simple interest accrued and due as on the cut-off date, along with the simple interest accruing from July 1, 2002 to March 31 2004, is to be funded.

Under the terms of the restructuring, an amount of Rs 14.83 crore of the funded interest is proposed to be converted into equity by financial institutions.

The balance amount of the funded interest will be converted into redeemable preference share (RPS) by the financial institutions. The RPS and the funded interest portion of loans of banks and debenture holders will carry zero interest till repayment which will end in 10 quarterly installments from October 1, 2013 to January 1, 2016.

The interest rate on term loans and working capital term loans would have a yield of nine per cent, with ballooning rates between seven per cent per annum to 13 per cent per annum. The interest on working capital loans will be nine per cent per annum under the CDR package.

The loans will be repayable in 28 quarterly installments (ballooning basis starting with three per cent in the year 2006-07 to 20 per cent in 2011-12).

Some lenders have opted for an early exit in three years with 60 per cent of the principal outstanding as on July 1, 2002 as an one-time settlement (OTS) amount. The OTS amount will be paid with 10 per cent as down payment and balance in 36 monthly installments without interest.

The preference share holders have the option to exit in three years in to restructure the shares payable from 2006 to 2016.