FIs build CDR capabilties as companies face stress
ICICI Securities Ltd on Friday appointed L Govind as head of structured products and corporate debt restructuring.
MUMBAI: ICICI Securities Ltd on Friday appointed L Govind as head of structured products and corporate debt restructuring. He joins ICICI Securities from Reliance Capital Limited, where he monitored RCL's investments in corporates. Institutions are building corporate debt restructuring capabilities as corporate India's credit quality is under strain because of lower profitability, weak demand, and tight liquidity. According to rating company Crisil, restructured loan portfolio of banks is expected to touch Rs2 trillion by March 2013
"Structured Products and Corporate Debt Restructuring is one of ICICI Securities key businesses,'' said Ajay Saraf, executive director, ICICI Securities Ltd.
In April, the corporate debt restructuring cell has received 14 proposals from corporates to restructure debt. 'Eight companies of the Tayal Group which are largely into textile, ICOMM Tele Limited, Surya Alloy Industries Ltd, PCH Retail have approached the corporate debt restructuring cell in April,'' said a senior official in the know of the development.
GTL Infrastructure, a telecom tower group; microfinance company BASIX; and Deccan Cargo and Express Logistic, founded by Captain Gopinath, Bharati Shipyard are among companies whose loans have been restructured this year, document from the CDR Cell shows. Other companies like Hotel Leelaventures, HCC and Lavasa await banks approval to be admitted to CDR cell.
CDR cell is a forum where lenders meet, discuss and approve debt recast for companies in financial trouble. Account can be eligible for CDR provided the initiative to resolve the case under the CDR system is taken by at least 75% of the creditors (by value) and 60% of creditors (by number).