The loan would be used to refinance high-cost funds raised by the steelmaker from Ares SSG-backed Assets Care and Reconstruction Enterprise (ACRE), an asset reconstruction company. Publicly listed Jayaswal Neco has proposed to raise ₹3,250 crore ...
The loan would be used to refinance high-cost funds raised by the steelmaker from Ares SSG-backed Assets Care and Reconstruction Enterprise (ACRE), an asset reconstruction company.
Publicly listed Jayaswal Neco has proposed to raise ₹3,250 crore through non-convertible debentures for a term of 3.5 years at a coupon rate of 18-20%, the people cited above said.
The proceeds from the NCD issue will reduce Jayaswal Neco's borrowing cost by 500-600 basis points, one of the persons said. Currently, the company is paying 23-24% on its ₹3,190 crore borrowing as of September 30.
Bank of America and Edelweiss declined to comment. Cerberus, Kotak and Allianz did not respond to ET's requests for comment. Jayaswal Neco could not be reached for comment.
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Jayaswal Neco is raising fresh debt partly because the terms of the agreement with ACRE requires the company to refinance the existing loan. The company informed exchanges that as per the terms of the restructuring support agreement dated August 2021, the company must refinance its ₹3,138.8 crore outstanding loans raised from ACRE.
“The company is confident that it will refinance the same on or before December 15, 2023 as per the terms of RSA,” as per the stock exchange disclosures on May 23, this year.
Between 2018 and 2021, ACRE-led investors acquired distressed debt from all the 11 banks offering 70-75 paise on a rupee. On acquiring the principal debt of Rs 5,700 crore, the debt was restructured, wherein 60% of the debt was deemed as sustainable and the rest was converted into equity, as reported by ET on May 28, last year.
ACRE had sold the loans to about ten investors including Oaktree Capital, Centerbridge Partners, Bank of America, Broad Peak Capital, Davidson Kempner, PAG and Arkkan Capital, as reported by ET.
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Jayaswal Neco, which fought a four-year legal battle to thwart bankruptcy, was among the second list of 28 companies issued by the Reserve Bank of India in December 2017. RBI wanted lenders to approach bankruptcy court for resolution of these companies. Although SBI had filed a petition, the company never got admitted due a series of litigations.
Eventually last year, the Supreme Court allowed withdrawal of the insolvency petition.
Tata Capital anchors Rs 2,300-crore refinancing of Jayaswal Neco debt
