The plan, which envisages gains for the company’s stock on its approval, is in the early stages of discussions.
NARCL had acquired the loan in cash and security receipts (SRs) for ₹640 crore earlier this year. The state-backed bad bank had bought the debt from lenders at a 93% discount. The banks involved include PNB, State Bank of India, Canara Bank, Bank of Baroda, Bank of India, Union Bank of India, RBL, IDBI Bank and Standard Chartered Bank.
A NARCL spokesperson did not immediately respond to a request for comment.
“The discussions are ongoing, and the debt will be restructured with a repayment reschedule,” said the source.
The unsustainable debt will be written off in a phased manner, the source added. “After the restructuring, sustainable debt will be crystallised and reflected in the balance sheet, while the remaining will be written off over the next five years,” the source added.Around ₹1,000 crore to ₹1,200 crore could be restructured as sustainable debt with a revised repayment schedule.As of July 29, 2023, over 80% of Simplex Infra’s lenders have transferred their debt to the National Asset Reconstruction Company (NARCL). NARCL has appointed India Debt Resolution Company (IDRCL) as its exclusive agent for managing and resolving this debt. The company is working with NARCL, IDRCL, and the remaining lenders to finalise a resolution plan.
The company has informed exchanges that it is taking steps to improve the group’s credit profile through measures such as the timely realisation of assets and settlement of arbitration claims. As of June 30, 2024, Simplex Infra is in default on financial debts of ₹4,983 crore and most of these debts have been assigned to NARCL as of the cut-off date, the company said in the latest financial statement.
Simplex Infra, owned by the Mundhra family of Kolkata, has a presence across several countries and is into civil construction projects other than EPC. In May 2023, the Kolkata bench of NCLT dismissed an insolvency application by the Central Bank of India against Simplex Infrastructures, calling it “transient insolvency” due to financial failure while the business model is strong. It had said that dues were pending from government agencies of ₹554 crore, which could help repay lenders.
