Promoter ML Mittal has told State Bank of India, Exim Bank, Union Bank of India and Bank of Baroda that the company will buy out the lenders’ CCPS ahead of the deadline.
The company was restructured out-of-court under the Reserve Bank of India’s (RBI) June 2019 prudential framework dealing with stressed assets. Under the restructuring process, the company’s debt of ₹600 crore was divided into sustainable debt of ₹220 crore and unsustainable debt of ₹380 crore. The CCPS were issued against the unsustainable debt portion.
“The company is currently engaged in discussions with various investors, including HNI and asset reconstruction companies, to secure funds for the purchase of CCPS based on a request from some bankers to get exit for such long tenure instruments,” said Mittal, managing director, Bharat Wire Ropes. “The banks are exploring the option of selling these long-term instruments that were initially issued at a coupon rate of 0.01% for a total 20 years tenure as per terms of issue. Banks have to sell to management or wait up to 20 years to convert into equity at that time prevailing market price as per Sebi/RBI guidelines.”
In March 2021, the company had issued 0.01% CCPS on preferential basis to the lenders under the resolution plan. These are unrated unlisted unsecured CCPS having face value ₹10 each at a premium of ₹99,990 per shares of ₹382.66 crore to lenders as per sanction of resolution plan.