According to the plan, McNally would rope in a consortium of investors for capital infusion into the debt-laden company.
Ailing for over several quarters, McNally argued that its performance was affected by the downturn in the infrastructure sector, working capital constraints and other external factors.
And because of these issues, it — along with one of its subsidiary companies — failed to meet its financial commitments to the lenders.
The resolution plan was based on a techno-economic viability study conducted by an independent agency appointed by the lenders.
Since loans to McNally, along with its subsidiary, have been categorised as non-performing assets, a majority of the banks have stopped charging interest on the loans.
According to McNally, the amount of interest not provided for has been estimated at around Rs 81.72 crore.
Moreover, it has deferred tax assets of Rs 579.40 crore up to March 31. “The parent company (McNally) has also signed a non-binding memorandum of understanding with a consortium of investors for infusion of funds into the parent company which is subject to due diligence and other terms and conditions, including approval of the resolution plan,” the company said.
Sources suggested that McNally’s current debt is estimated around Rs 1,500 crore.
During the quarter ended June 30, 2019, its revenue from operations declined by 56.60 per cent to Rs 222 crore, while losses reduced to Rs 32.58 crore. The revenue and losses during the Q1 period of the FY19 stood at Rs 511.53 crore and Rs 118 crore, respectively.
Besides McNally, two major listed entities of B M Khaitan Group posted a decline of in respective revenues during Q1, with mixed results in terms of profitability and losses.