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Jun 18, 2012, 08.25 AM IST
Controversy-embroiled Lilliput Kidswear, which is snowed under a massive debt of Rs Rs 873 crore, may be headed in for a bilateral debt restructuring or a corporate debt restructuring.
Controversy-embroiled Lilliput Kidswear, which is snowed under a massive debt of Rs Rs 873 crore, may be headed in for a bilateral debt restructuring or a corporate debt restructuring, reports CNBC-TV18’s Farah Bookwala.
The retail firm is in talks with 10 lenders for a debt package worth Rs 875 crore. These lenders are Oriental Bank of Commerce, Allahabad Bank, Bank of India, Axis Bank, ICICI Bank, SIDBI, Tata Capital, Standard Chartered bank, China Trust Bank and FirstLeasing.
The options on the table as of now are either bilateral debt restructuring or a corporate debt restructuring programme. While the CDR process will take 6-8 months, the bilateral restructuring will be completed by the end of June itself.
Under the terms of the debt recast plan, Lilliput seeks to convert its working capital loans of Rs 593 crore into terms loans. The company is also seeking a moratorium of seven quarters to repay the interest on its debt. For this, lenders are considering a Funded Interest Term Loan (FITL) worth Rs 180 crore
After seven quarters, the FITL and other debt will be repayable over six years in equal quarterly instruments.
Sources say that once the debt recast plan is complete, major private equity players might be roped in. 2-3 players might already be in talks, however names could not be ascertained.
CNBC-TV18 tried to contact Sanjeev Narula, promoter of Lilliput, but he could not be reached for comments.
The final decision on the debt recast plan comes only by Saturday, which is when the consortium of lenders and advisors will take the final decision.
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