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Business News/ Companies / Lenders to take control of Patel Engineering under SDR scheme
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Lenders to take control of Patel Engineering under SDR scheme

As on 31 March, Patel Engineering had stand-alone debt of Rs4,103.70 crore, according to data available on Capitaline

In March 2014, Patel Engineering had decided to sell Rs1,000 crore worth of non-core assets in a bid to reduce its debt.Premium
In March 2014, Patel Engineering had decided to sell Rs1,000 crore worth of non-core assets in a bid to reduce its debt.

Mumbai: Lenders to Patel Engineering Ltd have decided to take control of the company by converting some of their debt to majority equity under the strategic debt restructuring (SDR) scheme, the company said on Monday.

“Lenders have discussed and decided that SDR route should be opted for to preserve the value of the company," Patel Engineering informed BSE.

As on 31 March, Patel Engineering had stand-alone debt of 4,103.70 crore, according to data available on Capitaline.

Founded in 1949, the Mumbai-based engineering and construction firm has built in dams, tunnels, micro-runnels, hydroelectric projects, irrigation projects, highways, roads, bridges, railways and refineries, apart from real estate development, according to its website.

In March 2014, the company had decided to sell 1,000 crore of non-core assets in a bid to reduce its debt.

According to norms issued by the Reserve Bank of India (RBI) in June 2015, banks can convert part of a defaulting company’s debt into majority equity and assume operational control. They will then have 18 months to find a buyer for this stake.

Since the SDR rules were introduced, lenders have taken control of a number of firms. On 29 March, Unity Infraprojects Ltd had informed stock exchanges that its lenders had decided to invoke their powers under SDR and take control.

Other firms whose lenders are known to have invoked SDR include Electrosteel Steels Ltd, Ankit Metal and Power Ltd, Rohit Ferro-Tech Ltd, IVRCL Ltd, Gammon India Ltd, Monnet Ispat and Energy Ltd, VISA Steel Ltd, Lanco Teesta Hydro Power Pvt. Ltd, Jyoti Structures Ltd and Alok Industries Ltd.

On Monday, the Patel Engineering stock closed at 51 on BSE, down 0.58% from its previous close, while the benchmark Sensex fell 0.24% to close at 26,777.45 points.

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Published: 06 Jun 2016, 05:14 PM IST
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