Lenders of steel company Surana Industries propose to convert banks’ debt to equity

MUMBAI: Some lenders to steel maker Surana Industries have proposed conversion of a part of banks’ debt into equity by exercising the strategic debt restructuring option, according to two senior bankers. Banks have Rs 1,350 crore exposure to Chennai-based Surana.

The company was referred to corporate debt restructuring (CDR) a year ago but it failed to revive.

Lenders said the promoter failed to bring in the funds proposed in the revival package. However, company executives said banks stopped providing working capital loans which led to a financial crunch.

The promoter had to infuse Rs 32 crore in the company as per the CDR package. The lenders to Surana, led by IDBI Bank, met here on Tuesday to discuss options to revive the company. The meeting, however, remained inconclusive as not all lenders gave their consent to the proposal, the bankers cited earlier, who were present at the meeting, told ET.