A consortium of 15 lenders to Winsome Diamonds and Jewellery is likely to approve the proposal to restructure the company’s debt of nearly R4,000 crore by next week.
Eight lenders have accepted the fresh proposal by the company to restructure its debt via corporate debt restructuring (CDR) cell, while the rest are awaiting auditors report on Winsome due later this week, said bankers.
The jewellery exporter’s case was referred to the CDR cell on June 17 as it was unable to honour its debt repayment obligations to the banks. Last month, banks had rejected the proposal to approve the CDR package for Winsome, saying the terms were not suitable but lenders had asked the company to present a fresh proposal. The revised proposal by Winsome will be put to vote on July 25. The approval of an account for restructuring through the CDR cell is taken via a vote, where over 60% of the lenders concerned or lenders representing 75% of the loan amount need to approve the plan.
Winsome has reported a loss of R84.27 crore in the quarter ended March 2013 on revenues of R1,921 crore and expenses R1,996.7 crore. While approximately 95% of loan is believed to be secured by the company’s receivables and 5% is understood to be backed by mortgage of properties. Customers owe Winsome $875 million and group company Forever Diamonds close to $385 million. Winsome defaulted on loan obligations after customers failed to pay their dues to the company. However, customers have now proposed to pay $75 million every year for the first three years and then step up their payments from the fourth year, Ramesh Parikh, the director of finance, Winsome, had told FE last month.
One of the hiccups for the banks initially to restructure the account was that promoter Jatin Mehta had stepped down from the position of chairman in 2012 and currently operates from Dubai and Singapore. But bankers said they have been reassured as Mehta’s personal guarantee still stands.