Shares of PSU banks today gained up to 5 per cent after the RBI came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments.
The scrip of Punjab National Bank surged 5.18 per cent, Bank of India rose 3.14 per cent, and Bank of Baroda climbed 2.43 per cent on BSE.
Shares of Indian Overseas Bank went up by 2.32 per cent and SBI gained 2.27 per cent.
RBI had yesterday came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments under the supervision of IBA’s Overseeing Committee.
The Scheme for Sustainable Structuring of Stressed Assets (S4A) will cover those projects which have started commercial operations and have an outstanding loan of over Rs 500 crore.
RBI said the S4A, an optional framework for resolution of large stressed accounts, “envisages determination of the sustainable debt level for a stressed borrower, and bifurcation of the outstanding debt into sustainable debt and equity/quasi-equity instruments which are expected to provide upside to the lenders when the borrower turns around’’.
As per the resolution plan, the debt will be divided into two parts — Part A will include debt which can be serviced from the existing operation while remaining will be classified as Part B.
IVRCL rallies
Stocks of IVRCL jumped over 9 per cent in the morning trade today after the company said it has allotted 6.46 lakh shares to Bank of Nova Scotia as part of Strategic Debt Restructuring (SDR).
The company’s scrip gained 9.1 per cent to Rs 5.27 on the BSE.
Similar movement was seen on the NSE where the stock climbed 9.3 per cent to Rs 5.25.
The company had yesterday said it has allotted 6.46 lakh shares to Bank of Nova Scotia as part of SDR.
“Pursuant to provisions of Companies Act, 2013 and SEBI (Issue of Capital Disclosure Requirement) Regulations, 2009 and implementation of SDR, the company has made an allotment of 6,46,810 equity shares at a price of Rs 8,765 each, to Bank of Nova Scotia,” it said in a regulatory filing.
In December last year, the debt-ridden firm had said that its lenders have invoked SDR.
Strategic debt conversion option gives lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet the conditions stipulated under the restructuring package and take control of the company operations.
Stocks of IVRCL jumped over 9 per cent in the morning trade today after the company said it has allotted 6.46 lakh shares to Bank of Nova Scotia as part of Strategic Debt Restructuring (SDR).
The company’s scrip gained 9.1 per cent to Rs 5.27 on the BSE.
Similar movement was seen on the NSE where the stock climbed 9.3 per cent to Rs 5.25.
The company had yesterday said it has allotted 6.46 lakh shares to Bank of Nova Scotia as part of SDR.
“Pursuant to provisions of Companies Act, 2013 and SEBI (Issue of Capital Disclosure Requirement) Regulations, 2009 and implementation of SDR, the company has made an allotment of 6,46,810 equity shares at a price of Rs 8,765 each, to Bank of Nova Scotia,” it said in a regulatory filing.
In December last year, the debt-ridden firm had said that its lenders have invoked SDR.
Strategic debt conversion option gives lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet the conditions stipulated under the restructuring package and take control of the company operations.
Deepak Fertilisers
Shares of Deepak Fertilisers surged over 7 per cent in an early trade today after the Ministry of Chemicals and Fertilisers agreed to release about Rs 485 crore outstanding subsidy payment to the company.
The scrip gained 7.78 per cent to Rs 166.85 on the BSE in the morning trade.
On the NSE too, shares of the company jumped 7.78 per cent to Rs 166.85.
The company had yesterday said the Ministry of Chemicals and Fertilisers has agreed to release about Rs 485 crore outstanding subsidy payment to the company.
In a regulatory filing, Deepak Fertilisers informed that the Department of Fertilisers has been withholding its subsidy claims amounting to Rs 795 crore.
The Pune-based firm had filed a case in the Bombay High Court challenging the Department’s decision to hold back subsidy payments for using subsidised natural gas to manufacture decontrolled P&K fertiliser.
”...the Department of Fertilisers (DoF), Ministry of Chemicals and Fertilisers, has been withholding subsidy claims due to the company in accordance with applicable Nutrient Based Subsidy [NBS] scheme...since June, 2014 amounting to Rs 795 crore as on March 31, 2016,” the filing said.
“The company had since challenged the said withholding before Bombay High Court and the Department has now informed commencing the release of all subsidy arrears except an amount of Rs 310.52 crore in the interim. This part withholding is already under court’s purview for final award,” it added.