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| MPSIDC gets relief from creditors |
| BS Reporter / New Delhi/ Bhopal Sep 05, 2009, 00:56 IST |
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An ambiguity in proposals from its creditors — Apex Urban Cooperative Bank of Maharashtra & Goa Ltd and Mumbai District Central Cooperative Bank Ltd — has brought relief to the Madhya Pradesh State Industries Development Corporation (MPSIDC) till November 18 on issue of its debt payments.
An hour-long meeting between MPSIDC and its creditors ended in a stalemate as creditors of non-secured loans failed to submit a proposal to allow MPSIDC to repay its dues.
If the creditors of all three categories failed to come up on a consensus on settling their dues, which they have claimed from MPSIDC, the winding up proceedings of MPSIDC would be initiated.
“The representatives of the creditors under non-secured loan category failed to make it clear if they are ready to accept or reject the scheme as a result the meeting ended in stalemate till November 18. Although winding up of the corporation is imminent and creditors will get nothing out of it this way,” a source, who is involved in dealing with the matter, told Business Standard. Under the scheme, the Union ministry had categorised MPSIDC’s creditors in secured, non-secured and bond holders categories.
IDBI, Bombay Mercantile Cooperative Bank Ltd, Apex Urban Cooperative Bank of Maharashtra & Goa Ltd, Mumbai District Central Cooperative Bank Ltd, and others, besides 175 bondholders have to claim more than Rs 400 crore from the corporation but under the scheme it has to pay only Rs 210 crore to all of them.
The state government made budgetary provisions of Rs 210 crore to bail-out the corporation.
“The non-secured loan category creditors; Apex Urban Cooperative Bank of Maharashtra & Goa Ltd., The Mumbai District Central Cooperative Bank Ltd have demanded full payment of principal and interest on it, which SIDC cannot pay. Even if the arrangements are to be made, it requires prior approval of state cabinet and necessary provision in the state budget, which is an impossible task as of now,” the source added.
The Corporation had borrowed more than Rs 400 crore from various financial institutions and banks as secured and non-secured loans and disbursed it as inter corporate deposits (ICDs) among influential industrialists. Later they refused to repay and thus pushed the corporation under deep red.
The Corporation also failed to repay to its bond holders. It had floated bonds in 1999 to garner Rs 82 crore at 14.4 per cent interest. As many as five creditors have already filed a winding up petition against the corporation in Jabalpur High Court on grounds of its becoming “commercially insolvent.”
”Even if the creditors refused to accept the scheme, and it fails, none would get their dues. The board of the two creditors should work out a formula to recover their dues and save the corporation, but in the last three meetings they had not come up with some concrete proposals,” another source said.
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