October 6, 2016 1:38:35 am
Private sector lender ICICI Bank on Wednesday said it has acquired 1.1 crore shares in debt-laden ABG Shipyard by converting the compulsorily convertible preference shares (CCPS) it held. Post the conversion, India’s largest private sector bank by assets now has an 11.08 per cent stake in the company, it said in a regulatory filing.
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On September 21, shareholders of ABG Shipyard had voted against converting Rs16,397.5 crore the company owes to its lenders under the strategic debt restructuring (SDR) scheme. Earlier, lenders are believed to have changed their plan to invoke SDR in the company and instead were looking at the possibility of enforcing management change outside SDR.
A couple of months after laying down the norms for SDR, which allows lenders to a firm to pick up a controlling stake in it by converting a part of the debt owed to them in to equity, the Reserve Bank of India (RBI) had put out the norms for change in ownership outside the SDR.
“Change in ownership may be by way of sale by the lenders, to a new promoter, of shares acquired by invocation of pledge or by conversion of debt of the borrower into equity outside SDR, or bringing in a new promoter by issue of fresh shares by the borrowing entity or acquisition of the borrowing entity by another entity,” the RBI had said.
ABG’s corporate debt restructuring (CDR) package was cleared by a consortium of 22 lenders led by ICICI Bank in 2014 and was worth a whopping Rs 11,000 crore. As per the CDR package, it was given 10 years to repay, with a moratorium on interest payments of two years. The ABG recast was referred to the corporate debt restructuring cell in the October-December period of 2013, which saw referrals of Rs 45,000 crore. FE
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