Bangalore November 29, 2004
Raghuvir Badrinath
Business Standard
The BPL group, which is stitching together a Rs 1,400 crore debt restructuring
deal, will be getting an equity infusion of Rs 82 crore from a clutch
of non-resident Indian investors who are believed to be “old friends
of group patriarch T P G Nambiar.”
The fresh inflows will help BPL in its operations. This follows the
approval by banks and institutions for its corporate debt restructuring
(CDR) plan.
A senior group official said the Rs 82 crore will start to come in shortly
and “will invariably be of great help to the group.”
BPL is also putting together a strong strategy to revive its colour
TV (CTV) business, after having spun it off off into a joint venture
with Sanyo.
BPL got Rs 380 crore for this and the cash will be used to settle a
part of its debt.
As part of the CDR package, some lenders will exit on receiving cash,
while others will recast the remaining debt.
The amount to be recast will vary depending on the number of lenders
who decide to exit.
ICICI Bank has an exposure of Rs 600 crore to the group and is the lead
bank of the consortium of lenders, which includes Canara Bank, with
an exposure of Rs 150 crore, and Exim Bank, with an exposure of Rs 40
crore.
The company’s debt recast proposal for the remaining dues is expected
to be taken up at future meetings of the CDR. While details of the package
may be reworked by the lenders, for now, the CDR has suggested a 10-year
repayment with a reduced interest rate of about 12.5 per cent.
The company is said to have worked out three options for its lenders
as per the restructuring package. These are: exit the account altogether
with a 72 per cent ‘hair cut’ on the principal; take a 50
per cent hair cut, receive 25 per cent of the principal as cash upfront
and restructure the remaining amount through the CDR; take no hair cut,
receive 2 per cent of the principal as cash and restructure the remaining
amount.