Banks approve part conversion of Electrosteel Steels' debt into shares

The Board of Directors considered and took on record Strategic Debt Restructuring (SDR) Package approved by Joint Lenders’ Forum (JLF) for conversion of part of debt aggregating to Rs. 2,507 crore into 250.75 crore equity shares of INR 10 each, the company told the stock exchanges.

A consortium of 27 lenders, led by State Bank of India (SBI), has approved part conversion of Kolkata-based Electrosteel Steels’ Rs. 2,507 crore debt into 250 crore equity shares of Rs. 10 each under the SDR scheme.

The Board of Directors considered and took on record Strategic Debt Restructuring (SDR) Package approved by Joint Lenders’ Forum (JLF) for conversion of part of debt aggregating to Rs. 2,507 crore into 250.75 crore equity shares of Rs. 10 each, the company told the stock exchanges.

The company will convene an extraordinary general meeting (EGM) of the company’s shareholders on 7th January, 2016, to consider and approve the SDR.

SDR aims to allow banks to take majority ownership in troubled companies and look for new owners. It allows banks to classify the debt in question as "standard", rather than "bad" during the 18-month process.

The company has a debt burden of more than INR 9,600 crore.

Electrosteel Steels’ accumulated losses at the end of FY15 stood at INR 1,356 crore as against its peak net worth of INR 2,227 crore.

As on 30th September, the promoters’ shareholding in Electrosteel Steels stood at 45.23 per cent.