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Lenders to troubled jewelery manufacturer Winsome Diamonds and Jewellery (formerly Su-Raj Diamonds) are mulling to restructure the debt which is to the tune of Rs 4,000 crore.
A consortium of lenders including Punjab National Bank, Canara Bank had opened letters of credit (LC) to Winsome Diamonds and Jewellery, for the purchase of gold.
However, after the firm failed to pay the bullion lenders, the aforementioned invoked the LCs.
"We will be looking to recast the debt (of Winsome) in this quarter or second quarter," said RK Dubey, chairman and managing director of Canara Bank, which has an exposure of Rs 800 crore.
The loan is yet to become non-performing for the banks but in case the loan is not restructured or a part of the interest or principle not paid by the end of this month, then some of the banks will have to classify it as NPA.
Central Bank of India’s chairman and managing director MV Tanksale also said the banks will look into the possibility of restructuring the debt if the firm comes up with a viable repayment schedule.
“The problem started when the bullion banks' demand accelerated payment, that is, before the payment was due. In such a situation we have to give our borrower the opportunity. If banks believe if the payment schedule as given by the borrower is viable and the loan will be recovered then we can do restructuring.,” Tanksale said at the sidelines of a banking seminar. Central Bank of India has an exposure of Rs 500 crore.
Bankers said they have met the bank’s management recently which ensured of repaying the loan.
“We have met the company’s management in Dubai. The management said though they are facing some problem now but they will pay. The promoters are in touch with the bankers,” Tanksale said adding that the magnitude of the problem is big so it cannot be solved overnight.
Standard Chartered Bank was the lead bank of the consortium. Standard Bank of South Africa, Standard Chartered London, and Scotiabank have invoked the LC that the banks have issued for Winsome, after the company failed to pay within 90 days, as agreed at the time of the contract.
According to some banks, the company, an export-oriented one, may have exported jewellery to countries that are hit by slowdown. So, the importers delayed payments to Winsome, which in turn defaulted to the bullion banks, from where it had bought the stock.
According to the company’s website, its core activity includes manufacture and export of gold, silver and platinum jewellery studded with diamonds, colour stones and semi-precious stones as well as plain jewellery. It also manufactures and exports polished diamonds. Winsome was renamed last year and Madan B Khurjekar appointed non-executive chairman.
