Lenders of Patel Engineering are in talks with the firm to discuss the possibility of restructuring its debt through the Scheme for Sustainable Structuring of Stressed Assets (S4A), sources have told CNBC-TV18.
As part of the deal, banks may pull the company's debt from the strategic debt restructuring (SDR) account to put it in S4A.
While the SDR allows for a bank to take over company in default by converting its debt into equity and replace the promoter by selling it to a willing buyer, the S4A is a more enhanced scheme that allows lenders to split a company's debt into sustainable and unsustainable portions while allowing for the management to be retained if need be.
Patel's net debt stands at about Rs 4,000 crore. ICICI Bank is the lead lender to the company -- other lenders include Bank of India, Dena Bank, Canara Bank and Bank of Baroda.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
