ICICI, Axis Bank withdraw from Deccan Chronicle debt recast

Lenders of beleaguered Deccan Chronicle Holdings (DCH) failed to admit the debt restructuring referral in the Corporate Debt Restructuring cell. The lead lender ICICI Bank along with Axis Bank withdrew from drawing a recast scheme, in a meeting held among CDR member banks on Friday.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead Travelcafe
moneycontrol.com

Home » News » Business

Oct 20, 2012, 01.52 PM | Source: Moneycontrol.com

ICICI, Axis Bank withdraw from Deccan Chronicle debt recast

Lenders of beleaguered Deccan Chronicle Holdings (DCH) failed to admit the debt restructuring referral in the Corporate Debt Restructuring cell. The lead lender ICICI Bank along with Axis Bank withdrew from drawing a recast scheme, in a meeting held among CDR member banks on Friday.

Like this story, share it with millions of investors on M3

ICICI, Axis Bank withdraw from Deccan Chronicle debt recast

Lenders of beleaguered Deccan Chronicle Holdings (DCH) failed to admit the debt restructuring referral in the Corporate Debt Restructuring cell. The lead lender ICICI Bank along with Axis Bank withdrew from drawing a recast scheme, in a meeting held among CDR member banks on Friday.

Post Your Comments

Share Cancel

Saikat Das
moneycontrol.com

Lenders of beleaguered Deccan Chronicle Holdings (DCH), the publisher of three English newspapers and one vernacular daily failed to admit the debt restructuring referral in the Corporate Debt Restructuring (CDR) cell. The lead lender ICICI Bank with a credit exposure of around Rs 500 crore, withdrew itself from drawing a recast scheme, in a meeting held among CDR member banks on Friday, a banker who participated in the discussion told moneycontrol.com on condition of anonymity. Axis Bank (at around Rs 400 crore) too refused to be a part of the proposed debt recast. 

The CDR cell, under the regulatory framework of the Reserve Bank of India (RBI), is a joint forum, which caters to an official platform for both the lenders and borrowers to amicably evolve policies for loan restructuring. Restructuring is a process when a borrower is unable to make timely repayments and approaches the lender to dilute the original terms under which the loan was sanctioned. This could include lowering of interest rates, or extension of tenure.

A consortium of around 13 lenders jointly loaned Rs 4,100 crore to the Hyderabad based Deccan Chronicle. According to norms, a bank having 20% or more exposure to working capital can refer the loan case to CDR cell. Moreover, a loan account can also be referred to the CDR cell when at least 75% of the banks (by value) and 60% of creditors (by number) agree to resolve the case under CDR system.

However, it requires the consent of at least three-fourth of the lenders to draw a debt recast scheme for a particular company for admitting the case into CDR cell. Above all, the lead lender has to approve the admission of the referred case.

"With the lead lender withdrawing from the case, Deccan Chronicle restructuring is out of the purview of CDR cell. Now, it has to be resolved bilaterally. Generally, banks with higher credit exposure try to avoid the CDR route. It is because, those banks will incur losses due to repayment moratorium, moderation of interest rates and so on," the source said.

Earlier, banks postponed the decision of admitting the cash-strapped DCH case into CDR cell due to lack of unanimity. Some other lenders include IDBI Bank , Canara Bank , and Andhra Bank . Canara Bank was asked to prepare an audit report about the company's poor financials.

"If it is proved that the company has defaulted due to financial irregularities, ICICI Bank and Axis Bank are justified in withdrawing itself. CDR door should be closed to those companies which are suffering due to their mismanagement," said an advisor who deals with debt restructuring cases.

saikat.das@network18online.com


 

ICICI Bank stock price

On April 29, 2016, ICICI Bank closed at Rs 236.60, down Rs 3.55, or 1.48 percent. The 52-week high of the share was Rs 337.35 and the 52-week low was Rs 180.80.


The company's trailing 12-month (TTM) EPS was at Rs 20.54 per share as per the quarter ended December 2015. The stock's price-to-earnings (P/E) ratio was 11.52. The latest book value of the company is Rs 138.30 per share. At current value, the price-to-book value of the company is 1.71.

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
ICICI, Axis Bank withdraw from Deccan Chronicle debt recast

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login