Hemant Kanoria of Srei says differences among lenders can be catastrophic for stressed assets which are in need of quick decision-making
Sensing opportunity in India's mounting stressed assets, which stand at around Rs 8 lakh crore, many companies have evinced interest in the asset reconstruction business. However, it would be a major challenge for those who have floated special funds for this purpose.
Hemant Kanoria, chairman and managing director of Srei Infrastructure, believes the difficulty in reviving these assets would be compounded as the dissenting stakeholders like banks don't have a platform to sort their issues and handover assets to the new management.
Srei has recently floated a Rs 2,000-crore stressed fund, SREI Alternative Investment Managers Ltd, similar to efforts of others like Ajay Piramal who has floated his own Rs 6,000 crore fund.
"The indecisiveness (among the lenders) is the biggest issue. And there is no common platform where there could be an understanding of how to resolve issues. Therefore, everyone has a different way of thinking, and at the end of the day, everyone loses money as the asset dies. In case of stressed assets, immediate decisions have to be taken. Some could be wrong, but decision making process has to be fast. Indecisiveness would be catastrophic," Kanoria told dna.
Hemant should know. Srei's effort to revive at least two major assets from diverse sectors have hit roadblocks for different reasons. The first one is the 1080 megawatt thermal power project in Jharkhand promoted by Corporate Power, which belongs to the beleaguered Abhijeet group and recent one being the media business of Deccan Chronicle Holdings.
The lenders to Abhijeet including State Bank of India and Rural Electrification Corp, had earlier approached the Kanorias, but the talks failed. "We made a bid for Corporate Power where books had Rs 10,000 crore of loans. For two years it is now lying with Arcil (Asset Reconstruction Company India Ltd). At the end, lenders might get a fraction of that amount."
In case of Deccan Chronicle, a section of lenders has opposed Srei's bid to unite all the stakeholders to agree to a proposal to take a haircut and get a new promoter.
"There is now a stay order from the court, and we have no idea when things will move again," a frustrated Kanoria said.
Kanoria said Srei is ready to work with existing promoters in reviving projects in cases where assets became stressed because of some mistakes of promoters or because of some external factors like delay in government permissions. But in cases where money has been siphoned off, Srei would look at ways to bring in new promoters.
"We were spearheading efforts in cases like Deccan Chronicle. With so many lenders, each having own way of thinking, gradually the company will keep on dying. It's a classical case of someone in a critical condition taken to a hospital where the doctors are fighting among themselves over how to revive the patient. Ultimately, the patient will die. That might happen with most of the stressed assets," he said.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Hemant")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}