Ramky Infra has entered corporate debt restructuring (CDR) with six of its lenders- State Bank of India (SBI), State Bank of Hyderabad, Punjab National Bank (PNB), IDBI Bank, ICICI Bank and Axis Bank.
In an interview to CNBC-TV18, chief financial officer, Vijay Kumar says the company will have to monetize assets worth Rs 1,000 crore in the next three years.
The company has a debt of Rs 2,700 crore.
Below is the verbtaim transcript of Vijay Kumar 's interview with Latha Venkatesh & Sumaira Abidi on CNBC-TV18.
Sumaira: Can you take us through what are the terms under which this restructuring may take place?
A: The company currently is having about Rs 1,417 crore as the fund-based limits from the bank and we also have Rs 1,367 non-fund base, that is bank guarantee (BG) and letter of credit (LC’s) put together, it is about Rs 1,350. So, totally fund and non-fund based is about Rs 2,785 crore.
We got to work out a restructured scheme whereby we have requested the bank to fund the interest for 18 months- cash credit (CC) alone is 18 months, for all other things we have requested for 24 months repayment. The cutoff date starts from 1 October, that is 2014 and we have just now successfully concluded the restructured program whereby the bank provides additional fund based limits of about Rs 486 crore, inputs about Rs 232 crore of priority date and we also get funded interest term loan, we call it as an FITL and all put together it is Rs 486 crore additionally they are giving a fund. So, from Rs 1,470 crore which is existing fund base, you are moving to Rs 1,903 will be your new fund based limits available. They are also giving additional non-fund limits of about Rs 580 crore, we will be getting too for the future business requirements, all those kinds of things. So, only six bank out of nine is participating. Those three banks constitute only eight percent.
Latha: Only how much percent?
A: Eight percent only, six banks constitute about 92 percent of fund and non-fund, they are participating. Three of them are not able to participate, they are basically small bankers- Kotak, Stan Chart and Yes Bank, they are not able to participate.
Latha: This refinancing or restructuring was done after you did not pay two months of interest, after you became what is called a Special Mention Accounts (SMA-2) case?
A: Yes, after you become an SMA-2 and banks have recommended seeing the financial position that we may take the Joint Lenders' Forum (JLF) – we are not a Corporate Debt Restructuring (CDR), we are JLF restructure we call…(interrupted)
Latha: Have you been servicing your interest within that 90 days? At the moment are you standard asset at least for the banks that have restructured?
A: Yes, I am standard right now. I am servicing the interest including the three bank which has not participated, I have been servicing the interest, I am standard now.
Latha: And what are the milestones they have required of you? You get the money on what conditions?
A: First of all they are providing funds at 11 percent which is a concessional interest rate which is reduced from 14.5 and they are also giving two year’s moratorium for prepayment of interest and other obligations. So, we will not be paying until October 2016 we will not be paying either repayment or interest we will not be paying to them…(interrupted)
Latha: Your finance in the last reported quarter is Rs 77 crore. With this lowered interest and moratorium on payment of principal, how much does it fall to, your quarterly outgo will be what, Rs 70 crore, Rs 50 crore, Rs 40 crore, what will it be?
A: Let me tell you the last year 31 March, 2015 our interest cost is about Rs 273 crore. Let me put the full perspective, not a quarterly and with the reduced system we will go about Rs 180 crore maximum.
Latha: And what do you have to fulfill? You are telling us what the banks will give you but there must be some conditions expected of you in terms of asset sales or revenues or promoter money?
A: First and foremost I got to bring about Rs 54 crore of promoter contribution for this restructure which we did. We have infused about Rs 54 crore which is from promoter side to make this restructure workable and second, about Rs 1,000 crore of asset monetization I have to do. I have given an undertaking to them- in three years time we have lot of special purpose vehicle (SPV) assets, road assets and also promoter also agreed that he will also bring additional promoter contribution, to the extent of Rs 1,000 crore we agreed to provide into the system. So, that is a promise from our side and we got to monetize this asset and we will bring within that timeline so that everything will work out correctly.
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