Shares of SKNL declined by 4.17% to `3.47 on NSE.
Shares of SKNL declined by 4.17% to `3.47 on NSE.

S Kumars says scheme of restructuring filed with Bombay HC

The company owes `4,500 crore to 134 banks, including State Bank of India and ICICI Bank, and it has defaulted on debt repayment, says a report

Mumbai: Debt-laden textile and apparel firm S Kumars Nationwide Ltd (SKNL) said it plans to raise funds to repay its debt. This is SKNL’s second restructuring plan in the last 10 years.

“A Scheme for Restructuring, pursuant to Section 391 of the Companies Act, 1956, for debts availed by the Company from Banks and Financial Institutions has been filed with the High Court of Judicature at Bombay on April 08, 2015," the company said in a filing to the National Stock Exchange on Monday.

The restructuring scheme will not affect the shareholders’ rights, it said.

The company owes 4,500 crore to 134 banks, including State Bank of India and ICICI Bank, and it has defaulted on debt repayment, according to a report dated 16 April proxy advisory firm Institutional Investors Advisory Services (IiAS).

The Mumbai-based textile firm had posted a loss of 209 crore for the quarter ended June 2014 and has been falling behind in its disclosures and announcements over the last few months. It had posted a loss of 62 crore in the same period in 2013.

As on 31 December, 2014, the company’s promoters owned about 3.59% and the rest which includes retail investors and financial institutions owns 96.41%, data available with the NSE says.

SKNL is a leaderless company and the lenders have withdrawn their board nominees and institutional shareholders have exited the stock, leaving retail shareholders to hold the baby, says the IiAS report. “Given their exposure, IiAS believes that S Kumars’ lenders need to step in and take control, and either appoint a management that can pull the company out of its morass, sell it or move for its winding up: it’s an option than to writing-off loans and then waiting passively for the government to inject more capital," the report said.​

Shares of SKNL declined by 4.17% to 3.47 on NSE.

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