Debt restructuring plan of BPL is on

After protracted negotiations and delays, BPL Limited's plan to restructure its Rs 1,400 crore debt is finally moving ahead. In a creditors' meet held here on Saturday, majority of the creditors reportedly agreed to the Corporate Debt Restructuring (CDR) plan.

This will now pave way for the company to move forward with its JV with Sanyo. No comments were forthcoming from the company.

However, BPL has to wait for the Kerala High Court's final nod to the plan as a few of the banks are opposing the plan and are reportedly seeking legal recourse.

BPL, under its CDR, had offered three options and one option for banks and financial institutions is to agree to a waiver of 72 per cent of their loans.

They will in turn need to take steps to withdraw legal suits filed against BPL Ltd.

Another option for lenders is an upfront cash payment aggregating to 25 per cent of loans and waiver of 50 per cent of the loans with the remaining amount being restructured over an extended period.

Under the third option, 75 per cent of the outstanding will be converted into loans carrying zero per cent interest repayable in 10 years while the remaining will be spread over an extended period.

If the high court gives its approval for the CDR, BPL will be able to go ahead with its JV with Sanyo.

According to senior officials in BPL, there is a need to raise Rs 92 crore from a foreign investor to meet the statutory liabilities of Rs 51 crore and unsecured creditor payments of Rs 15 crore. Sanyo, after this, will pump in its fresh equity into a colour TV joint venture signed with BPL last year.

BPL had hived off its core colour television business into a 50:50 joint venture with its long time technology partner Sanyo for a consideration of Rs 322 crore. This money will now be used to settle a part of the Rs 1,400 crore debt.