Industrial Finance Corp-oration of India (IFCI) has decided to take a host of measures to reduce its non performing assets (NPAs). These include restructuring the asset portfolio, restricting exposure to chronic industries and individual companies and invoking the state government guarantees which have failed to make payments.
Disclosing this, P V Narasimham, chairman and managing director of the financial institution, said several companies have taken loans on the backing of state government guarantees and have not made any interest payments over the last 8 to 10 years. "The institution is seeking one time settlement in respect to government-guaranteed cases," he said.
According to IFCI officials, around Rs 450-500 crore has been locked up in the state government-guaranteed category.
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Meanwhile, as strategy to reduce NPAs, IFCI has decided to restrict new assistance to certain individual companies and also to select 7 to 8 industries.
The financial institution has also decided to fund promoters who would bring upfront equity contributions. "We are also planning to seek rights from the Board for Industrial and Financial Reconstruction to sell or change the management of the sick units for enhancing the recovery mechanism," said Narasimhan.
The institution has the highest NPAs in the textile industry at 13.1 per cent amounting to Rs 516.2 crore, followed by iron and steel 11.4 per cent, Rs 449.54 crore. According to Narasimham, the institution is confident of recovering 50 to 60 per cent of the NPAs by way of settlement in the next three-to-four years.
IFCI has formulated a restructuring strategy for seven companies which aggregate to Rs 364.4 crore, while another 11 cases, aggregating Rs 761.6 crore, are likely to be restructured. According to an