With bankers unwilling to relent, corporates with huge pile of debt are moving fast to ensure that they do not lose control of their companies.

While Subhash Chandra-backed Essel Group has managed to convince its lenders to give it time till September 30, Anil Ambani-promoted Reliance Communications on Sunday said it plans to propose a similar debt resolution plan in the National Company Law Tribunal as was being earlier pursued with creditors. This comes even as Naresh Goyal is fighting it out with Jet Airways’ lenders to keep control of the debt-ridden airline.

Essel Group entities’ share price has been under pressure due to fears of a default. In a second round of meeting with lenders, the company has managed to convince bankers that there will not be an event of default declared till September 30. This consent provides the required amount of time for the Group’s management, to complete the strategic sale process of its key assets.

RCom’s asset sale plan has been stuck due to legal and regulatory complexities. Lenders’ patience is running out as they have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway. RCom said there is lack of 100 per cent consensus, as mandated by RBI’s, on all important issues, amongst over 40 lenders, Indian and foreign despite the passage of 12 months and over 45 meetings. Therefore, RCom’s management will propose a similar debt resolution plan in the NCLT process, as was earlier being pursued outside NCLT.

For Goyal, the next two weeks will be crucial as Jet Airways is seeking shareholders’ approval to convert debt into equity. This would give lenders room to pick stake in the company, bring down Goyal’s stake from 51 per cent and allow joint venture partner Etihad to increase its stake to 49 per cent.

 

Related Topics