9 July 2019: Banks have already signed Inter-Creditor-Agreement (a mandate for all the banks to sign if they wish to find resolution on any recognised NPA account, having exposure above Rs 2000 Cr), for close to 22 NPA accounts in last one month post the issue of the new RBI Circular for stressed asset management.
Sources tell BTVI, Inter-Creditor- Agreement (ICA) has been signed for companies where they have resolution in sight. Currently, the total exposure in the companies which have already become NPA or have defaulted, is being considered for a resolution is worth close to Rs 3 lakh Crore.
BTVI collates data on the companies for which resolution seems to be the way ahead, giving hopes of survival before they can be taken to NCLT. Out of the two dozen companies where resolution through Restructuring, Change of Management or One-Time-Settlement cane be a possibility, few power sector companies have also found some hope.
Some names which have recently defaulted in the banks ‘books of accounts’, include DHFL, Suzlon Energy, Videocon Oil Ventures & Cox & Kings. Resolution in these companies is in sight as sources confirm.
The purpose of Inter-Creditor-Agreement was to ensure that banks to be given 30-days grace period to review and pick on accounts which have possibility of resolution insight. Once the ICA is signed, it enters a standstill period, when the particular account cannot be taken to NCLT for 180 days.
RS 3 Lk Cr Debt Now Under ICA:
Power sector holds a major share in the list of NPA accounts held by banks. Post the Supreme Court orders that held on the Power companies admission in NCLT, banks manage to look for resolution in few outside the court for now.
Sources tell BTVI, Prayagraj Power, GMR Chhatisgarh, KSK Mahanadi, Jaiprakash Power Ventures, Coastal Energen, Simhapuri Energy, Rattan India Nasik and Emco Energy are a few of the power and energy companies, which hhave scope for some buyers or restructuring through a majority consensus approach among lenders.
Indian Banking Association Chief Executuve VG Kannan speaking exclusively with BTVI said, “Before any resolution plan is signed, it is mandatory that Inter-Creditor- Agreement is signed, binding lenders to come together and work together. There is also space given by the bankers to prepare the plan & vote on the plan.”
When asked about the expected value locked in the cases signed under Inter-Creditor- Agreement, V.G.Kannan said, “Amount of exposure in the resolution for cases signed under Inter- Creditor-Agreement, could be around Rs 3,15000 Cr – Rs 415,000 Cr” as currently the circular is only implementable for large ticket accounts which have been declared NPA/defaulters. Resolution in 60%-70% is quite possible to happen among the companies taken under the ICA Gambit.