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PNB drags Hanung Toys to bankruptcy courts

Punjab National Bank (PNB) is taking Hanung Toys & Textiles, an NCR-based soft toys and home furnishing company, to the bankruptcy courts for unpaid loans totaling Rs 2,600 crore.

PNB-led consortium of lenders collectively loaned the amount to the toy maker, which was in debt restructuring for about Rs 1,800 crore three years ago.

“The bank has already proposed to depute a Delhi-based resolution professional for the case and will move NCLT within a week or two,” said one of the two executives aware of the move.

Hanung Toys, PNB, SBI, BoB, and ICICI Bank did not comment. Other lenders could not be contacted immediately. There are about 15 lenders to the company.

The corporate debt restructuring plan crafted three-years ago failed to take off as Ashok Bansal, chairman and managing director of the company, could not bring in his share of equity at Rs 82 crore. That led to an increase in outstanding dues to Rs 2,600 crore.

Reserve Bank of India has scrapped all such debt restructuring schemes, mandating a time-bound resolution of bad loans failing which the borrower must be taken to the dedicated insolvency resolution courts.

The company’s production units comprise facilities to make toys, home furnishings and textiles in Roorkee, Bhiwandi and Noida. The toys manufacturing units were set up in the Noida Special Economic Zone.

During 2006-07, the company had come out with a public share-sale and the equity shares were listed both on BSE and NSE on October 20, 2006.

During 2007-08, the company started production in its new home textiles unit at Roorkee. It bagged the long-term export order from a leading US buyer in home furnishings as well as soft toys. Also, the company signed the MoU with a Chinese company to buy the soft toy business in China.

Last month, Deepika Gera, an independent director of the company, resigned from the board.

Gross bad loans in the Indian banking system amounted to about Rs 8.5 lakh crore in December, minister of state for finance Shiv Pratap Shukla informed Parliament last week. Industrial advances accounted for about three-fourths of such sticky loans.
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