Lenders to decide action plan on Reliance Naval loans soon

September 15, 2017
Sangita Mehta

Banks led by SBI will soon call for a lenders meeting to discuss what to do with Reliance Naval and Engineering which has defaulted on loans worth Rs 9,000 crore. The Anil Ambani group firm, which was called Pipavav Shipyard and Reliance Defence in earlier avatars, has missed payments to lenders for the last two and a half months, and its loans will be classified as non-performing loan if it does not pay up in the next 15 days. 

"Reliance Naval is classified as special mention account-2 or SMA-2 with all banks. Somehow, in the past few months, the company has managed to make critical payment before the end of the 90-day deadline to prevent the account from slipping into the bad loan basket," said two senior bank officials. " This time we are not very confident if the company will be able to make critical payment before the month end," they added. Special mention accounts-2 or SMA-2 are those where bank have not received payment from the borrower for over 60 days. 

"The account has been classified SMA-2 by the lenders for more than three years," the company said in a response to an email. "The company was in CDR (corporate debt restructuring) when it was acquired by Reliance Infra (in January 2016). Post takeover, Reliance Infra has initiated steps for exit from CDR and a new debt financing package. Upon implementation of the said new financing package, the account will become regular," the company added. 

The Reliance Group acquired 18 per cent of Pipavav Defence in an allcash deal worth Rs 819 crore in March 2015 from Nikhil Gandhi's SKIL Infrastructure. It bought another 11.2 per cent for Rs 545 crore in an open offer.

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