India

Lenders to Vijay Mallya-promoted Kingfisher Airlines may have no option other than restructuring the carrier's loans again. In case of a second restructuring, banks have to classify the asset as non-performing, which requires higher provisioning, the Business Standard reported. Bankers are working on a formula that would aim to keep the re-payment period and the net present value of the asset specified during the first restructuring intact, by increasing the interest rate. In this case, there would be no increase in the provisioning requirement.

A consortium of 17 banks have agreed to a restructuring package for Air India where Rs 20,000 crore of short term working capital loans will be converted into longer duration term loans and part of this money will be converted to unsecured credit that the government will repay, the Financial Chronicle reported. The repayment period of the loan has been extended by 10 years with a corporate guarantee from the Government of India and hypothecation of aircraft with the instalment beginning within two years.

Struggling Indian airline Kingfisher on Wednesday said it was in talks with bankers to reduce high interest rates on its $1.2-billion debt, but denied it was pursuing a fresh loan restructuring, Agence France-Presse reported. Ravi Nedungadi, chief financial officer of the giant drinks group UB group which controls the airline, said in a statement the carrier was attempting to swap high-cost rupee borrowings for lower-cost foreign debt. "The banks are in active consideration of these requests," Nedungadi said.

The government is working on a package to restructure loans to the tune of Rs 4,000-5 ,000 crore for the textiles sector but has ruled out a debt waiver, The Economic Times reported. Facing a slowdown, the textiles sector has been saddled with loans and has proposed a four-pronged strategy to deal with the burden, textiles secretary Rita Menon said. It wants the interest rate on the debt to be reset, besides seeking conversion of working capital into fresh debt, which will cost Rs 835 crore.

India mining giant Ashapura Minechem Ltd. filed for Chapter 15 bankruptcy protection Tuesday in U.S. Bankruptcy Court in Manhattan in a move to block foreign shipping companies that won a $125 million legal judgment against it from raiding the company's U.S. bank accounts, Dow Jones Daily Bankruptcy Review reported. The Mumbai-based company, a mineral miner and processor with debts topping $223.4 million, argued that the seizure of its U.S.-based assets would jeopardize the financial overhaul underway in its home country.

Beleaguered discount retailer Koutons Retail India has secured its bankers' approval for a corporate debt restructuring, or CDR, package, The Economic Times reported. The CDR Cell, constituted by the Reserve Bank, cleared the package on Thursday with majority support of the lenders after nine months of negotiations. It paves the way for a reorganisation of Koutons' unmet financial obligations and prevents the retailer from defaulting on its loans and a possible bankruptcy. The Delhi-based retailer is under a Rs 600 crore debt that carries an average cost of 14%.

After months of turmoil, there finally seems to be some respite for debt laden Koutons Retail India Ltd, the Economic Times reported. The debt restructuring plan for the apparel manufacturer has been finalised and the lenders will meet next week for the final approval, according to sources familiar with the development told ET Now. The company's total debt is Rs 660 crore out of which the long term debt of Rs 500 crore that will be payable over a period of 10 years including a 2 year moratorium.

The government on Friday said it would take three months to finalise the financial restructuring plan of cash-strapped national carrier Air India. "The exercise of finalising the financial restructuring plan and restructuring of loans would take about three months," civil aviation minister Vayalar Ravi told the Lok Sabha in a written reply, the Hindustan Times reported. Ravi's reply comes just a few days ahead of a crucial meeting of a ministerial panel headed by finance inister Pranab Mukherjee.

The proposed corporate debt restructuring (CDR) of at least five troubled Andhra Pradesh-based microfinance institutions (MFIs) is set to take off because banks might relax the stiff terms in the form of personal promoter guarantees, livemint.com reported. The deadline for completing the CDR process expires on 6 June.

The Air India board, in a meeting in Mumbai yesterday, cleared the debt restructuring plan of the airline, the Business Standard reported. The plan was prepared by SBI Capital market Ltd (SBICAPS) and vetted by financial advisory firm Delloite, after the Reserve Bank of India asked the airline to get it done by an independent firm. “The plan will now be discussed by the civil aviation ministry and the RBI, and our high-cost debt will be converted to low-cost.