Steel firms hogged corporate debt recast

Corporate Debt worth Rs 65,412 cr restructured in 3 years

Banks and financial institutions have restructured corporate debt amounting to Rs 65,412 crore during the last three years, with only 7 per cent of the cases "" involving Rs 5,568 crore "" being rejected.

According to the latest data compiled by the finance ministry, nearly 42 per cent of the debt, amounting over Rs 27,000 crore, restructured by the lenders was accounted for by the 11 iron and steel accounts.

Fertiliser and chemicals sectors accounted for 11.39 per cent and 10.38 per cent respectively of the amount restructured. Refineries (7.45 per cent) and telecom (6.09 per cent), power (4.84) and cement (4.14 per cent) were the other major beneficiaries.

IDBI Ltd referred the maximum number of 56 cases, accounting for 47 per cent of the debt restructured. Of the 106 proposals cleared by the corporate debt restructuring (CDR) group, 91 per cent were referred by IDBI, ICICI Bank and the State Bank of India. In value terms, IDBI, ICICI Bank and IFCI Ltd referred 96.6 per cent of the cases.

Officials said the recovery rate was satisfactory with 60 of the 61 fully implemented cases regular in paying their installments. Debt servicing was yet to commence for 16 companies as a moratorium had been agreed upon.

In five cases, however, debt servicing was irregular. The moratorium for seven cases had been extended due to less than budgeted performance or delays in implementation.

The CDR was also reviewing the performance of corporates post restructuring. Performance was better than the projected in 22 cases, while it was in line with projections for 25 companies. For the remaining 14 companies, performance was below par.

Of the 106 cases cleared, restructuring packages for debt amounting to over Rs 50,000 crore had been fully implemented under the CDR, while there were delays in 32 cases involving Rs 13,737 crore.