Creditors to IL&FS Tamil Nadu Power reject NARCL's offer
The Committee of Creditors for IL&FS Tamil Nadu Power Company (ITPCL), a consortium of 17 banks led by Punjab National Bank, have turned down a proposal from the National Asset Reconstruction Co (NARCL) to acquire the debt of ₹9,000 crore and is moving ahead with a debt restructuring plan.
During a meeting held last week, the lenders' committee rejected the government-backed bad bank's offer, a source said.
Lenders felt that NARCL's offer of ₹4,700 crore in a 15:85 structure was below their recovery expectations through the debt restructuring process. Under 15:85, 15% of the amount is paid upfront while the remaining is paid by way of security receipts.
«Lenders have rejected NARCL's offer as the company has cash of around ₹3,000 crore which will improve their recovery in case of restructuring,» a source said.
There is a dispute regarding the distribution of cash accumulated within the company over the past five years. While some lenders want cash to be distributed prior to receiving approvals for the restructuring, the company insisted on obtaining all restructuring approvals first, leading to a deadlock, as reported by ET.
Now, the ₹3,000 crore will form part of the restructuring and will be used to repay debt once all restructuring formalities are complete, the source added.
«ITPCL is pursuing a restructuring route to resolve this asset.
