SIB has Rs250cr exposure to ailing SIntex Inds

PNB moves NCLT to initiate CIRP against Sintex to recover Rs1078 cr

KOCHI: A new disclosure by the financially embattled Sintex Industries shows that the Thrissur-headquartered South Indian Bank (SIB) has got a term loan exposure of Rs250 crore to the ailing company as of December end, 2019.

Sintex has term loan outstanding in excess of Rs400 crore with Punjab National Bank (PNB), Export Import Bank of India (EximBank), Bank of India (BoI) and Bank of Baroda (BoB).

In another key development, Punjab National Bank (PNB) has filed a petition before the National Company Law Tribunal (NCLT), Ahmedabad,
under Section 7 of Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Sintex, for an amount of Rs1077.62 crore.

Sintex Industries, which currently owes Rs255.29 crore to SIB– more than the sanctioned amount, has defaulted on its interest payment to the bank on May 31, 2019 resulting in an interest default of Rs17.23 crore as of December end, 2019.

Sintex that has a total term loan outstanding of Rs4,670.83 crore has defaulted to the tune of Rs275.24 crore on principal and Rs300.85 crore on interest payments so far.

The exposure to Sintex, which has been in the news recently for a series of defaults including principal and interest on non-convertible debentures (NCDs), can’t be taken kindly by SIB that has as part of a new strategy decided to pare its corporate exposures and derive strength from building retail lending.

Rumours and unconfirmed reports have been doing rounds that SIB has more skeleton to come out from its cupboard, and this may have long restrained its share price around Rs10, which is about one-third of its book value (BV) – one of the poorest price-BV ratios among the private sector banks.

A Sintex filing to the stock market on Wednesday said the company’s current defaults amount to Rs2006.60 crore with default in principal alone adding up to Rs1705.95 crore and interest default being pegged at Rs300.65 crore.

While Sintex’s total outstanding (borrowings) from banks and financial institutions are computed at Rs6101.54 crore as of December end, the aggregate financial indebtedness including short-term and long term debt is estimated at Rs6774.90 crore.

 

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