As Lanco Infratech walks towards NPA resolution; other defaulters' shares gain
Lanco Infratech becomes the first company to be pushed towards insolvency for its bad loans.
Key Highlights:
- Lanco Infratech owes Rs 44,364.60 crore to banks
- RBI directs IDBI Bank to take Lanco Infratech under Insolvency & Bankruptcy Code
- Lanco's had net loss Rs 2,049.13 crore by end of FY17
Lanco Infratech has become the first company among the list of 12 identified by the Reserve Bank of India (RBI) to face corporate insolvency proceeding.
Media reports on Tuesday suggested that Lanco Infratech is the first one to go through bankruptcy proceedings.
On June 13, 2017, RBI through its Internal Advisory Committee (IAC) recognised 12 accounts for resolution under Insolvency & Bankruptcy code (IBC).
In a statement to BSE dated June 17, 2017, Lanco mentioned that the Reserve Bank of India had directed IDBI Bank – the lead bank of Lanco to initiate corporate Insolvency Resolution Process (CIRP) for the company under the Insolvency & Bankruptcy Code, 2016.
Lanco further said, “The amounts mentioned in above referred letter shall be read as Rs 8,146 crore for fund based outstanding exposure and Rs 3,221 crores for non-fund based outstanding exposure as on March 31, 2016.”
Share price of Lance tumbled for second consecutive day on BSE, down by 9.57% while touching lower circuit limit of Rs 1.70 per piece.
On Monday, the power and road producer Lance plunged to by nearly 20%.
Lanco sits on a debt amounts of Rs 44,364.60 crore taking the second spot after Bhushan Steel which has debt of Rs 44,478 crore.
In the financial year end 2016-17 (FY17), Lanco's consolidated net loss widened to a whopping Rs 2,049.13 crore compared to Rs 269.10 crore in the similar period of the previous year (FY16).
Meanwhile, share price of other defaulters in RBI's list saw surge in their share price on Tuesday.
Share price of Bhushan Steel, which has the highest chunk of loan, surged by nearly 6% on BSE in the early trade.
Monnet Ispat & Energy stocks jumped over 10.30%, trading at Rs 33.20 per piece. While Amtek Auto climbed by 7.25% on the BSE index trading at Rs 25.15 per piece.
Alok Industries shares was trading at Rs 2.49 per piece, soaring by nearly 6%.
These companies are on the top of RBI's list and has more than Rs 12,000 crore loan defaulted of banks.
Also Read: Shares of these 12 companies plunge as banks begin meet to resolve NPA issue
As per RBI, these 12 defaulters accounts owe Rs 2.5 lakh crore of banking system which would be 25% of gross NPAs.
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02:28 PM IST