Essel Group chairman Subhash Chandra assures lenders on debt repayment, says borrowers promise settlement of Rs 4,262 crore
Chandra said in the statement about his financial situation that he had Rs 22,000 crore to back his guaranties and that he has no personal debt
Essel Group chairman Subhash Chandra has assured the lenders about the ongoing settlement of unpaid loans from several group entities. Chandra said in the statement about his financial situation that he had Rs 22,000 crore to back his guaranties and that he has no personal debt.
According to Chandra, the repayment plan calls for a commitment of Rs 6.25 crore from his personal funds, plus an extra Rs 1,494 crore from other group firms. Although Chandra stated that the majority of the outstanding amounts had been paid, some lenders are challenging the National Company Law Tribunal's (NCLT) approved repayment plan and are looking for ways to appeal the ruling.
Concerns have been raised by a number of creditors, who point out a large disparity between their claims and the sum covered under the repayment plan. The proposal barely allots Rs 6.25 crore for creditors out of a total of claims that are close to Rs 22,006.57 crore, according to court filings. This significant disparity has prompted concerns about how well the Insolvency and Bankruptcy Code (IBC) facilitates suitable recoveries.
On Sunday, Chandra said that borrowers related to his personal guaranties had promised to deposit the remaining Rs 4,262 crore and reconcile their accounts with lenders.
According to a statement from Chandra's office, the borrowers paid Rs 3,803 crore of the total Rs 4,808 crore disbursed, leaving a debt of just Rs 998 crore. “Against a payable amount of Rs 998 crore, claims filed were Rs 5,311 crore. After reducing the settled/paid claims of Rs 1,049 crore, the remaining is Rs 4,262 crore,” the statement said.
The statement claims that HDFC Bank has four or five accounts with a total outstanding balance of Rs 775 crore. But it stated that these are assertions without a legitimate personal guaranty. There is an outstanding balance of Rs 348 crore at Canara Bank. According to the statement, this was a loan secured by the borrower's US assets.
Furthermore, a sum of Rs 1,322 crore is still owed to LIC Housing. It stated that part security is available and that this has been given for settlement. Union Bank has an outstanding balance of Rs 164 crore that can be secured. There is an outstanding balance of Rs 119 crore at RBL Bank.
“The borrower offered to pay as settled with the large lender, but they refused,” as per the statement.
Meanwhile, sources suggested that a number of creditors are united in their displeasure with the NCLT's decision and have stated their intention to contest the validity of the authorised repayment plan in an effort to obtain greater compensation from Chandra and his affiliated companies.
