Souce: Ruchika Chitravanshi / New Delhi March 22, 2010, 0:40 IST
A group of lenders to Vishal Retail, who are not part of
the ongoing corporate debt restructuring (CDR) exercise,
are taking other routes to recover their money.
One such bank,DBS, had approached the
Debt Recovery Tribunal (DRT), a senior
official in the bank confirmed.
The DRT hearing is scheduled on Monday. Vishal Retail
owes Rs 40 crore to DBS.
The bank is also believed to have sent a “winding up” notice
to the debt-ridden company. “We were not happy with the things
we were getting. For the non-CDR lenders, it was a raw deal.
We are basically doing whatever we can to recover our money,”
the senior official said.
The non-CDR lenders include Barclays, DBS, Deutsch Bank (MF) and
Life Insurance Corporation. Some of the other non-CDR banks, too,
are considering an approach to DRT to get a better deal and negotiate
the terms of repayment.
Vishal Retail had opted for CDR last November, with six banks
joining the process. The company has total debt of Rs 730 crore,
with non-CDR lenders accounting for Rs 260 crore.
On being asked, Vishal Retail Chairman Ram Chandra Agarwal said:
“While the CDR is going on, no other litigation will be valid.
Most banks are on board with us. If one or two aren’t,
then they eventually will be.”
According to financial analysts, however, the DRT procedure
can impact the CDR exercise. “The CDR might reconsider
the payment made to the non-CDR banks to find an amicable solution,”
said Bhavesh Parekh, head–restructuring services, KPMG.
DRT may also request the company to look into a compromise
package through arbitration. In case of “winding up”, the matter
would be in the hands of the High Court. “In most cases,
it has been seen that the High Court keeps the larger interest
in mind. If the existing business can generate employment,
increase value to creditors, then it may ask all lenders to do
structuring in a way that 75 per cent of banks have to agree,” said Parekh.
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