Videocon may be referred to bankruptcy court
Lenders are gearing up to refer VideoconBSE 3.69 % Industries to the bankruptcy court as they are unsure of the company’s proposed debt recast programme clearing the central bank’s conditions to deal with defaulters, three senior bank officials said. However, they expect to complete the restructuring of Jaiprakash AssociatesBSE 12.07 %’ account before the Dec 31 deadline.
In its August circular, the RBI said any debt recast package outside the NCLT would be valid only if two rating firms gave investmentgrade rating to the debt’s sustainable portion, which will remain on the company’s book even as the unsustainable part is restructured.
Videocon with Rs 47,500 crore of debt and Jaiprakash Associates with Rs 26,000 crore were the top two in a bunch of 29 defaulters that the Reserve Bank of India listed in August and ordered lenders to find a resolution by December 31. Barring a handful of the accounts on this second list from the RBI, most would be referred to the National Company Law Tribunal (NCLT) this week, the officials said, speaking on the condition of anonymity.
As carried in ET