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Moser Baer Solar’s Corporate Debt Restructuring plan gets bankers’ nod

According to reports, Moser Baer Solar (MBS), pioneer of solar power in India and a subsidiary of Moser Baer India, has received bankers’ in-principle approval for its proposed `739 crore corporate debt restructuring (CDR).

In April 2012, MBS had approached the CDR Cell for the purpose.

MBS’s bankers — Punjab National Bank (PNB), State Bank of India (SBI), Bank of Baroda (BoB), IDBI Bank and Indian Overseas Bank (IOB) and a few other banks — met in Mumbai on Monday.

A public sector bank official who attended the meeting confirmed the approval.

Although it is a no-brainer that MBS is facing some sort of financial problems and hence unable to repay its existing debts, it is not clear why exactly the company needs CDR.

MBS officials declined comment. “We are in a silent period,” said an MBI spokesperson.

The banker, however, said CDR will encompass a Rs 500-crore term loan, working capital loans of Rs230 crore and the remaining Rs9 crore of dollar loans.

PNB’s exposure to MBS is to the tune of Rs200 crore, SBI’s Rs150 crore, IOB’s Rs130 crore and BoB’s Rs60 crore.

A few other banks account for the rest (Rs199 crore).

The approval will be followed by a new plan for repayment of MBS’s loans. The company will be relieved from interest payment. Repayment tenure will be also extended.

MBS last made news in January this year when it commissioned a 5mw solar power project in Rajasthan with a capacity of 92 lakh units of electricity per annum and saving carbon emissions equivalent to 8,400 tonnes annually.

The project, developed jointly with the ministry of new and renewable energy and spread over 60 acres of rocky terrain, is expected to power up over 70,000 households in Jodhpur.

The CDR Cell was formed in 2001 as both the Reserve Bank of India and the government felt the need for such an exclusive body to resolve cases of corporate financial sickness.

The cell maintains records of all CDR cases reported by banks and financial institutions.

CDR reduces debt burden on the company concerned by lowering interest rates and extending loan tenures.

One comment

  1. IDFC uses the Mutual fund money to support Moser baer likewise banks use public money. MBI is a listed company. Solyndra went to bankruptcy with DOE funding. Is it not high time to question the corporate decision under RTI otherwise, how such fund will be recovered and when the big ticket investments become viable. It is always nice to create large corporate, but, working to recover the losses brings the GDP down and the fund usage goes heywire. It is high time to question the corporate decisions and make people responsible with RTI so that listing and minority share holder’s interest shall be protected. Look at Hohn (The Children Investment) is questioning Coal India !!

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