- (1.) This is a petition for obtaining sanction of the Scheme of Restructuring (in short, the Scheme), without any modification,between petitioner's company and its secured creditors, to reduce the interest liability on the debt burden on the petitioner company. The Scheme, was prepared by State Bank of India through its Industrial Finance Branch, New Delhi, the leader of the working capital consortium to the petitioner-company under the Corporate Debt Re-structuring Mechanism (CDR' Mechanism),and submitted to the Corporate Debt Restructuring Forum ('CDR Forum') set up by the Reserve Bank of India as a package to the company involving re-phasing of repayment of the existing terms loans and debentures, and induction of fresh funds, to the extent of erosion in the working capital of the petitioner's company.
(2.) The 'CDR Mechanism' set up by the Reserve Bank of India vide its Circular dated 23.8.2001, ensures a timely and transparent mechanism for the restructuring of the corporate debt, of viable corporate entities affected by internal or external fixation outside the purview of the Board of BIFR, DRT and other legal proceedings for the benefit of all concerned. It applies to multiple banking syndicate consortium accounts, with outstanding exposure of Rs. 20 crores or above ,with financers and financial institutions.
(3.) The participating lenders namely State Bank of India, Bank of India, ICICI Bank, IDBI, State Bank of Patiyala, Punjab National Bank and Bank of Baroda, all parties to Corporate Debt Restructuring Empowered Group (CDREG) approved the scheme in meeting dated 15.9.2003 and granted their respective approval detailed in para 13 of the petition. Salient features of the scheme provides? as follows; I. Rescheduling of existing term liabilities, commensurate with future cashflows. ii. Reduction in interest rates and bring them to a level which could be afforded by the sugar units. iii. Arrangement to induct of fresh funds to, meet shortfall in working capital requirements resulted by fall in free sale sugar prices. A short fall of Rs. 22 crores has been identified by SBI. iv. Setting up ethanol project in distillery division and expansion therein so that revenues from distillery division may be increased. v. Cost cutting measures to be taken by the Company.;