BusinessLogrBusinessLogr
  • Home
  • Stocks
  • Finance
  • Business
  • Company
  • Economy
  • Industry
  • Investing
  • Car News
  • Contact Us!
Reading: Neelachal Ispat Nigam goes for 5/25 to avoid becoming an NPA
Share
Aa
BusinessLogrBusinessLogr
Aa
  • Home
  • Stocks
  • Finance
  • Business
  • Company
  • Economy
  • Industry
  • Investing
  • Car News
  • Contact Us!
Follow US
© 2023 BusinessLogr News Network.
BusinessLogr > Economy > Neelachal Ispat Nigam goes for 5/25 to avoid becoming an NPA
Economy

Neelachal Ispat Nigam goes for 5/25 to avoid becoming an NPA

deep
Last updated: 2015/12/24 at 11:28 AM
deep Published December 24, 2015
Share
4 Min Read
SHARE

Steel safeguard duty

Neelachal Ispat Nigam has asked banks to refinance close to Rs 1,000 crore of loans relating to its steel plant at Kalinganagar, Odisha, under the Reserve Bank of India’s 5/25 scheme, lenders aware of the development told FE. The company is promoted by MMTC and Industrial Promotion and Investment Corporation of Orissa (IPICOL).

A senior banker confirmed the company has been late on repaynts and although not a non-performing asset (NPA) yet, the account is visibly stressed. “Only a flexible repayment under 5/25 can save the asset from slipping into NPA category,” the banker added. State Bank of India (SBI) leads the consortium of bankers and has loaned the company R400 crore.

Click here to see graph

Neelachal reported a loss of R233 crore in FY15 on revenues of R1,248 crore, partly due to an interest expense of R173 crore.

Total loans at the end of March 2015 stood at R1,235 crore, down 8% from the previous year. Lenders to the company include SBI, Allahabad Bank, Indian Overseas Bank, Bank of Baroda and State Bank of Mysore, among others. The company is led by Ved Prakash as its chairman.

While MMTC owns 49.78% of the company, IPICOL held 15.29% as of March 2015.Other major shareholders include NMDC (12.87%) and Orissa Mining Corporation (12.32%), while IDBI Bank, Central Bank of India and Syndicate Bank together hold 4.6%.

The company has an integrated 1.1 million tonnes per annum iron and steel plant at Kalinganagar Industrial Complex, and produces pig iron and blast furnace coke along with nut coke, coke breeze, crude tar, ammonium sulphate and granulated slag.

Refinancing under 5/25, which has caught the attention of corporates and bankers alike, has made analysts wary of long-term asset quality. Crisil analysts say the 5/25 scheme may mask the true picture of asset quality and warned that about 15% of these assets could slip into NPA territory over the longer term. They estimate Rs 80,000 crore of assets could be refinanced under the scheme this year.

“We believe that the 5/25 scheme will replace the restructuring tool earlier available to banks especially for large loans. Restructured assets were visible in the reported numbers of banks. But now, the assets that will be part of the 5/25 scheme, they will not be necessarily be reported by banks and could get masked in the NPAs,” they said.

Since December 2014, the RBI has allowed banks to refinance existing infrastructure projects under the 5/25 model provided the projects have commenced commercial operations. The central bank said in a notification: “Banks may fix a fresh loan amortisation schedule for the existing project loans once during the lifetime of the project, after the date of commencement of commercial operations without this being treated as restructuring.”

[“source -financialexpress”]

You Might Also Like

body shop with loaner car

WHO says monkeypox has been spreading undetected as global cases rise to more than 550

FedEx Acquires TNT specific, method better delivery in Europe

Endurance International Completes Constant Contact Acquisition

BigCommerce, Xero Partnership adds Cloud Accounting to online Stores

TAGGED: Neelachal Ispat Nigam goes for 5/25 to avoid becoming an NPA
deep December 24, 2015
Share this Article
Facebook Twitter Email Print
Share
Previous Article Advanta merger to weigh on UPL earnings in the near term
Next Article Bata India: walking on rough terrain

Most Viewed Posts

  • 20 Fitness Franchises: Planet Fitness and Beyond
  • Choosing the Right Legal Structure For Your Business
  • payday loans that work with chime bank
  • bmo harris express loan payment
  • find a loan shark on craigslist

Most Viewed Posts

  • 20 Fitness Franchises: Planet Fitness and Beyond
  • Choosing the Right Legal Structure For Your Business
  • payday loans that work with chime bank
  • bmo harris express loan payment
  • find a loan shark on craigslist

Recent Posts

  • Crunching the Numbers: Monthly Payments on a $1 Million Dollar Business Loan
  • Unlocking Construction Dreams: Navigating the Down Payment Maze for Your Construction Loan

© 2023 BusinessLogr News Network.

Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

[mc4wp_form]
Zero spam, Unsubscribe at any time.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?