Lenders of household appliances maker Khaitan Electricals have invoked strategic debt restructuring and has fixed August 17, 2016, as reference date for the exercise.
"At the Joint Lenders Forum (JLF) meeting, the lenders have invoked strategic debt restructuring (SDR) in the company and adopted the 'reference date' for the purpose as August 17, 2016," Khaitan Electricals informed BSE.
It further added: "It was also decided that another JLF meeting will be held to decide the way forward in this regard".
Khaitan Electricals had approached the Board for Industrial and Financial Reconstruction (BIFR) in July this year for declaring it a sick company after its accumulated exceeded its net worth. The application is still pending with the BIFR.
Under strategic debt restructuring, banks take control of the distressed listed companies to recover loans. It allows creditors to convert debt into equity and take over the management of defaulting companies.
"The company has submitted an application for reference to the BIFR as the company has become a Sick Industrial Company pursuant to the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA)," Khaitan Electricals had informed BSE.
On May 28, 2016, Khaitan Electricals had informed that its accumulated losses had exceeded the net worth as on March 31, 2016 and therefore it has become a sick industrial company.
PTI KRH .
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