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Showing posts from August, 2013

Essar Steel likely to get another Rs 6,000 cr, will help firm avoid CDR

A consortium of 15 lenders led by State Bank of India (SBI) will likely add to its exposure to the highly-leveraged Essar Steel India, lending it an additional Rs 6,000 crore. Essar Steel, promoted by the Ruias, has already borrowed close to R30,000 crore. Essar group, in turn, will bring in Rs 2,000 crore by way of promoters’ contribution. Of the R6,000 crore, the company will use around R2,000-2,500 crore to repay group companies from whom it borrowed to pay banks. Bankers defend the fresh exposure saying without this, Essar Steel would end up in the corporate debt restructuring (CDR) cell. They point out that although the company has not defaulted, it might have trouble servicing its debt. “It’s better to give them the additional amount than restructuring the account since that would mean taking a hit on the interest,” a senior banker explained. The banks plan to take this fresh exposure to the steel company at an interest rate of 12.50%. A restructuring allows the bo

Ratnakar Bank gets credit rating of A1+ by ICRA

The Indian Credit Rating Agency says that the risk management and the desire to scale up business volume are the key factors to rate Ratnakar Bank ,in the future. Recently, the CRA affirmed the A1+ rating to the Ratnakar Bank , a Kolhapur based money lender, for the certificates of deposit plan, which is 1000 crore Rupees. In addition, the credit rating agency assigned an MAA rating, for the sustained outlook for the FD program. Very recently, the Ratnakar Bank has signed an agreement with the Royal Bank of Scotland and the bank is to take over some of the portfolios as well businesses of the bank’s Indian branches. In recent years, the Ratnakar bank is able to maintain its asset quality. The banking is seriously working to reduce the slippage and to recover the sanctioned loans on time and to improve its balance sheet growth. Right now, the bank is performing well and looking for further development, according to the Indian Credit Rating Agency. At present, the Non Pe