With the closure of corporate debt restructuring (CDR) window just five days away, the CDR cell of banks have formally okayed the Rs 7,600-crore recast proposal of Pipavav Defence and Offshore Engineering Company.
With banks approving the proposal, the company will get moratorium on repayment, interest rate reduction and fresh working capital.
While the independent evaluation committee (IEC) had agreed on February 9 that a restructuring was viable, many banks did not take a mandate from their respective head offices to recast their debt.
Banks agreed for the CDR earlier this week and formally approved it on Thursday.
Pipavav CDR will be the last major CDR proposal to be approved by the banks as the regulatory forbearance will end on March 31. From April 1, banks will have to make a higher provisioning for debt recasts, making it unviable for them.
Pipavav had a net debt of Rs 5,480.8 crore in FY14 and reported an operating profit of Rs 778.7 crore in the same period. In Q3FY15, the company reported a net loss of Rs 70.2 crore on the back of revenues of Rs 252 crore.
Shares of the company closed at Rs 56.40 on Thursday, down 0.79 per cent from its previous close.
Anil Ambani-owned Reliance Infrastructure acquired 18 per cent stake in the company at a price Rs 63 per share, aggregating Rs 819 crore recently.