India

Chennai-based Consolidated Construction Consortium Ltd (CCCL) has applied for the Corporate Debt Restructuring Scheme. "The necessary application for the same is being filed with CDR cell for its approval," the company said in a filing to the exchanges, the Business Standard reported. R Sarabeswar, chairman and chief executive officer of CCCL, did not offer a comment when contacted. Several infrastructure projects, including Chennai Metro, have been delayed due to various reasons affecting the company's balance sheet, according to industry sources.

India's Lanco Infratech Ltd. is reportedly in the process of signing one of the country's largest corporate debt restructuring deals. The said deal will allow the debt-stricken infrastructure developer to reschedule repayment of as much as INR7,500 crore and give it access to new credit of INR3,500 crore. Economic Times, quoting Lanco Infratech's Amardeep Jaiswal, said the company and a consortium of over 25 lenders led by Mumbai-based IDBI Bank Ltd. on Friday met in Gurgaon to work out the details of the deal. Jaiswal is Lanco Infratech's legal affairs head.

The decision by India’s top investigating agency to probe a third billionaire-led mining deal in six months puts at risk government efforts to revive $160 billion of stalled projects, Bloomberg News reported today. The Central Bureau of Investigation said on Dec. 23 it started probing Anil Agarwal, who runs the country’s biggest aluminum and copper producer. It alleged irregularities in his 2002 purchase of the state’s 26 percent stake in Hindustan Zinc Ltd., a producer of zinc used in making metals and chemicals.

Both the Reserve Bank of India, the central bank, and State Bank of India, the largest of the big, state-owned banks, are voicing determination to go after recalcitrant borrowers as the volume of problem debts, whether acknowledged or not, continues to grow, the Financial Times reported in a commentary. It is not clear whether this time is different and the banks are really serious about putting pressure on borrowers who are unable or (in many cases) unwilling to repay the banks. But they should be.

The new chairman of State Bank of India has pledged to crack down on rising levels of corporate bad debt that have alarmed policy makers and foreign investors in Asia’s third-largest economy, the Financial Times reported. Arundhati Bhattacharya took over the state-backed bank in October. India’s biggest lender, which controls about a fifth of the country’s $1.5tn of bank assets, has struggled to cope with a sharp increase in non-performing loans in the aftermath of India’s recent economic slowdown.

Shares of India realty major Unitech today plunged by nearly 10 per cent amid reports that the company has received a default notice from LIC Housing Finance on a loan taken in 2007 for a luxury housing project in Noida, The Economic Times reported. Unitech's scrip tanked 9.54 per cent to close the day at Rs 15.65 on BSE. Intra-day, the scrip lost 14.45 per cent to Rs 14.80. On NSE, the stock slumped by 8.99 per cent to Rs 15.70 apiece. With share price plunging, Unitech market value shrunk by by Rs 435 crore to Rs 4,091 crore.

The prevalence of so-called "wilful" defaults is symptomatic of what critics say is a loose credit culture that plagues Asia's third-biggest economy, keeping underperforming companies in business, crowding out other borrowers and leaving taxpayers on the hook to recapitalise state banks, The Economic Times reported. The Reserve Bank of India defines a wilful defaulter as a borrower that is able but unwilling to pay, has diverted loan proceeds for other than their initially stated use, or has overstated profits in order to obtain a loan.

India's central bank governor Raghuram Rajan may raise policy rates again after shocking markets by increasing them in only his first meeting, signalling he is willing to risk prolonging what is already the lowest economic growth in years in order to quash persistent inflation, Reuters reported. Raising the repo rate by 25 basis points to 7.50 percent as India stumbles through its worst economic crisis since 1991 puts pressure on New Delhi to relieve supply-side bottlenecks in the economy, such as poor infrastructure, that keep inflation high even when demand is soft.

Vikram Bakshi, the ousted managing director of Connaught Plaza Restaurants that runs McDonald's chain in North and East India, faces battle on another front with the Housing and Urban Development Corporation (Hudco) moving to seize his assets after a loan default, the Economic Times reported. The government-backed lender has filed a case against Bakshi after he failed to meet payments on loans worth Rs 80 crore for his privatelyheld Ascot Hotels & Resorts, Noida, near New Delhi.

Shares of India’s state-run banks are trading near record-low valuations as concern grows about narrowing risk buffers and rising bad loans, Bloomberg reported. Indian Bank, United Bank of India Ltd. and Union Bank of India, have fallen more than 55 percent this year to Sept. 12, the most among the nine government banks that are leading declines for India’s 40 bank stocks. Shares of the nine lenders are all trading below the value of their assets amid lower-than-average capital adequacy levels and bad loan ratios that are about double those of private-sector lenders.