Construction major HCC's Rs 5,000-crore debt recast has become the first case to get approval of a high-level panel set up under the Reserve Bank of India's (RBI) new Scheme for Sustainable Structuring of Stressed Assets (S4A).
The scheme, passed by an ICICI Bank-led joint lender forum in September, has been now approved by the RBI-mandated Overseeing Committee and can be implemented now, banking sources said.
Under this recast of HCC's Rs 5,000-crore debt, which has become the first successful resolution case under the RBI's highly ambitious S4A tool, 52 per cent of debt (nearly Rs 2,600 crore) was found to be sustainable and would be serviced as per the original terms and conditions, including about interest rate and tenure.
Of the remaining 48 per cent (Rs 2,400 crore), a debt of Rs 1,000 crore would be converted into equity for the banks, which could eventually give them 25 per cent stake in the company's post-scheme equity capital. The remaining debt of Rs 1,400 crore would get converted into optionally convertible debentures to be issued to the lenders. These measures would now go for approval from HCC's shareholders.
Bankers said quite a few other cases are being worked out for resolution under the S4A scheme and some of them should soon see the light of day.
