Banks, FIs sue BPL to recover dues

BPL’s corporate debt restructuring proposal shows that while BPL Mobile Cellular has made a loss of Rs 236 crore on sales of Rs 293 crore in FY 2003-04, BPL Mobile Communications sales were Rs 443 crore and it posted a loss of Rs 25 crore during the same period.

Sources say Rajiv is in talks with various multinationals to sell off at least one of BPL’s loss-making cellular phone licenses. The sale could easily fetch the group at least Rs 2,000 crore taking the valuations of recent telecom deals, say telecom analysts.

The Nambiars are looking for a bailout from the cellular businesses as 19 institutions have sued BPL to recover their dues. Of this, six have even filed winding up petitions against the company in the Kerala High Court.

According to the CDR proposal, Indian and foreign institutions are stuck with a exposure of Rs 1,467 crore in BPL alone. BPL cellular companies were provided with a separate package two years ago. ICICI Bank, which has the maximum exposure of Rs 516 crore, and all other 34 institutions have classified the BPL account as ‘sub-standard’. ICICI calls it a ‘restructured’ asset which means the account is under deep stress.

ING Bank, which has exposure of Rs 20.39 crore against the group, moved both Debt Recovery Tribunal in Mumbai and High Court of Kerala as the company defaulted in paying its dues. Indusind, BNP Paribas, Bank of Rajasthan, IL&FS, UTI Bank, Abu Dhabi Commercial Bank, and a host of other companies have moved the courts as cheques issued by BPL Ltd bounced.

The CDR package envisages that FIs should take a haircut of 72 per cent of all its dues in lieu of upfront cash of 28 per cent in full and final setlement.

The second option for the FIs is to take 25 per cent cash, waive 50 per cent of loans and convert the rest of the loans with 8 per cent rate payable in 10 years from 12.5 per cent loans.

The third option is to convert 75 per cent of loans into 0 per cent loans repayable in 10 years.