After Edelweiss ARC acquired over 12% stake in Jai Balaji Industries, which escaped an insolvency proceeding, as a process of restructuring a part of the beleaguered steel maker’s debts taken over from banks, another bad-loan aggregator Omkara Assets Reconstruction is believed to be restructuring another part of the total debt.
Edelweiss ARC has recently acquired 12.74% stake in Jai Balaji Industries (JBIL), the flagship company of Jai Balaji Group, converting some of the debt into equity.
“For Omkara Assets Reconstruction, restructuring of debts is still pending. It is in the final process,” a source from the company told FE on condition of anonymity. Edelweiss ARC and Omkara ARC have big exposures in JBIL as most of the banks sold their loan portfolios to them. Significantly, the company’s name had featured in the RBI’s second list of large corporate loan defaulters.
“Omkara is still acquiring the loans,” the source cited above said. Officials of the asset reconstruction company could not be immediately contacted for comments.
JBIL has a total debt of around Rs 3,000 crore. Lenders to the company included State Bank of India, Punjab National Bank, IFCI, Indian Overseas Bank, IDBI Bank, Federal Bank, UCO Bank, Allahabad Bank and United Bank of India.
According to another source familiar with the matter, banks have already sold around 97% of the outstanding debt to the asset reconstruction companies. Edelweiss ARC bought more than 40% of the debt from the financial creditors, and the balance was acquired by Omkara ARC.
The consortium leader, SBI, had sold its loan exposures to Jai Balaji Industries to Omkara Assets Reconstruction earlier this year. UCO Bank and Allahabad Bank had also sold their entire loan exposure to the company to Edelweiss ARC, taking huge haircuts.
SBI had earlier filed an insolvency petition against JBIL to start corporate insolvency resolution process in the event of a loan default. However, the company has been able to escape the insolvency proceeding.
via Jai Balaji Industries: Omkara ARC rejigs debt bought from banks – The Financial Express
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