Examining options to recover Gammon Infra dues: Canara Bk

Lenders to infrastructure company Gammon Infra, are planning to invoke Strategic Debt Restructuring (SDR) to recover Rs 10,000 crore worth dues.

Speaking to CNBC-TV18, Rakesh Sharma, managing director and chief executive officer, Canara Bank says the bank is examining various options to recover dues from the company and will await the Board's nod on the same.

The bank has lent close to Rs 2000 crore to the infra company.Below is the verbatim transcript of Rakesh Sharma’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Latha: Can you update us on what the banks are doing about Gammon India? Have you already converted the shares or will it be done very soon?A: Basically the issue is there regarding strategic debt restructuring (SDR). There is some stress in the company but we are examining various options like monetisation of assets, 5:25, refinancing or SDR. So, certainly within two–three days the decision will be taken with the approval of the board. However, as of now as far as our bank is concerned we have not taken decision that SDR will be done. However, all these options are being examined and we will take the decision shortly.Latha: You mean you have not decided to go for converting your loans into equity?A: No, yesterday there was meeting and the proposal was there but the final approval has to come from the board side.Sonia: What is the exact exposure that Canara Bank has to Gammon India?A: We have around Rs 2,000 crore exposure; it is around 27 percent. As of now accounts are standard so as such there is no issue.Latha: Gammon India is a standard account?A: Yes, standard account.Latha: In spite of it you can force an SDR? You can force a strategic debt restructuring?A: Even in standard account we can do it.Latha: How many banks boards will have to agree to the strategic debt restructuring?A: The majority will have, of course the decision of the leader is there in ICICI Bank. So, shortly this decision will be taken and then we will inform you.Latha: How is it – of the 19 banks 10 have to agree, majority have to agree? How many have to agree?A: Majority have to agree. I don’t have the details now. However, yes, as far as our bank is concerned we will take the decision shortly.Sonia: You have decided that you will use the strategic debt restructuring route, right?A: Not yet, various options are there so we will examine all the options and shortly we will take a view.Latha: Gammon India went into corporate debt restructuring (CDR) and it could not complete its part of the deal or could it?A: The projections, which were made as per CDR they have not been able to meet the projections so that is why some delay in realisation and all these are there.Latha: In spite of it you will give them a 5:25, in spite of the fact that they have not kept their word?A: Various options are there that is why we have not taken final decision. We will examine all the pros and cons.Latha: You are saying that 5:25 is an option?A: We will decide what are the options and then we will see what can be done. SDR is also one of the options. Let us see shortly within two-three days we will take a decision.