Exposure to foreign exchange derivatives, currency hedges and swaps may make the Company to sink
While details of the action plan would differ from case to case, lenders would also ask the promoters to pledge more of their holdings and sell some group companies to generate resources. In addition, promoters would be required to bring their own resources to indicate their skin in the game, a bank executive said.
A Joint Lenders Forum is working on the contours of the corrective action plan, a senior public-sector bank official said. Banks have a Rs 26,000-crore exposure to the group; of this Amtek Auto accounts for over Rs 7,800 crore.
In June, the Reserve Bank of India (RBI) had allowed banks to hold 51 per cent or more of the equity after a debt-for-share conversion. Under this, banks will have to closely monitor the performance of a company and appoint professional management to run it. At the same time, the banks themselves should try and sell their stake "as soon as possible".
Courtesy :Abhijit Lele of Business Standards