PSL in talks for $825 million debt recast

Steel pipe maker PSL Ltd is in talks with lenders including State Bank of India and ICICI Bank to restructure its Rs 4,500 crore debt, a company official told Reuters.

PSL has been stuck with excess capacity as gas pipeline projects in India have been delayed, G Gehani, a director and company secretary, told Reuters.

Lower-than-expected output from Reliance Industries' KG-D6 gas field, off India's eastern coast, has disrupted plans for industrial use of natural gas in India.

Under corporate debt restructuring, lenders typically extend the repayment tenure for the borrower and lower the interest rate.

"We make pipes for particular projects. If projects do not come we cannot do anything about it," Gehani said on Friday.

 

India has planned a natural gas pipeline grid of 30,000 kilometres by 2017.

"The projects under national grid have gotten delayed. So business is low, as a result profitability is low, and so our liquidity is affected," he said.

Wind turbine maker Suzlon Energy and telecom infrastructure services provider GTL Infra are other companies whose debt is being restructured through a similar process.

PSL, which has a market capitalisation of about $40 million, lost 161 million rupees in the December quarter compared to a net profit of Rs 6.6 crore in the period a year earlier.