Following promoters’ inability to bring an investor on board, lenders to Surana Industries have initiated recovery actions including approaching the debt recovery tribunal (DRT) and evoking the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, also known as the Sarfaesi Act, sources told FE.
According to bankers, the joint lenders’ forum (JLF) did not want to wait any longer for an investor and has decided to go ahead with recovery. “We cannot wait for ever and decided last month that recovery actions will be initiated,” a source said, adding that banks have now become very aggressive with regard to recovery.
“Our focus is on recovery and resolution of stress at the moment, and therefore you will see heightened efforts from us,” said a senior public sector banker. Speaking to reporters last week, Banks Board Bureau chairman Vinod Rai had said the government’s top priority was resolution of stress before it consolidates.
The company owed lenders Rs 2,959 crore in FY15, higher by 7% over the previous year. In FY16, the company reported a loss of Rs 526 crore after paying finance costs of Rs 162 crore on the back of Rs 585 crore in revenues.
In February, lenders dropped a plan to initiate a strategic debt restructuring (SDR) scheme for the company, as the majority had failed to approve the same. The consortium had been looking to revive the loss-making and heavily-indebted firm by converting a part of the outstanding loans into equity and thereafter trying to bring in a new promoter.
The disagreement between bankers had originated from the fact that several of them had already classified the exposure as non-performing assets. As such, the
‘NPA’ classification would have to be retained by these banks even if an SDR had been initiated.
Lenders to the company include IDBI Bank, IFCI, Allahabad Bank, Canara Bank, Bank of Baroda, State Bank of India and Bank of India.
Surana Power, Surana Mines and Minerals and Surana Green Power are the three wholly owned subsidiaries of the company. Surana Power is in the process of setting up a 2 x 210 MW thermal power plant in Raichur.
The company’s FY15 annual report said although the original project cost was estimated at R2,400 crore in 2010, the same has been revised to Rs 3,090 crore.
Operations of Surana Power’s 35 MW thermal power plant were adversely affected due to fall in power tariff rates and increase in input costs, the company said.
