ICICI Bank is on the lookout for a buyer for its Rs 193-crore exposure to Srinagar Banihal Expressway (SBEL), a subsidiary of the listed Ramky Infrastructure. In January 2020, Indian Overseas Bank had moved the Hyderabad bench of the National Company Law Tribunal, seeking that insolvency proceedings be initiated against SBEL.
In a public notice, ICICI Bank said of its Rs 192.8-crore loan to the company, Rs 36.8 crore is senior debt and Rs 156 crore is subordinated debt. It has security over all assets/rights of the borrower under its project document and escrow account, by way of first ranking charge for the senior debt and second ranking charge for the subordinated debt, along with a corporate guarantee and sponsor support agreement from the promoter.
“Presently, the borrower is a non-performing asset with the bank/other lenders and is facing litigations initiated by other lenders viz. recovery suit with DRT,” the notice said. The asset is being offered on a cash-only basis.
According to a rating rationale dated January 14, 2020, issued by Icra, SBEL has outstanding borrowings of Rs 1,440 crore. Icra rated the company ‘D’ as it was not cooperating with the agency.
Ramky Infrastructure holds a 74% stake and Jiangsu Provincial Transportation Engineering Group Company holds 26% in SBEL, which was set up for construction, operation and maintenance of the four-laning of the Srinagar-Banihal section of National Highway –1A from km 187.00 to km 189.350 (Banihal bypass) and km 220.700 to km 286.110 (approximately 67.76 km) on a design, build, finance, operate and transfer (annuity) basis under the National Highways Development Project.
According to Icra, the total revised cost of the project is Rs 2,000 crore. The total concession period is 20 years, including the construction period of three years. SBEL will receive a fixed annuity payment of Rs 134.82 crore semi-annually for 17 years. The project is being funded by Rs 1,440-crore debt and Rs 360 crore of promoters’ contribution and one-time fund infusion of Rs 200 crore from the NHAI.
“The project achieved provisional commercial operations date (PCOD) in April 2018. As against planned financial progress of 100.00%, actual financial progress is 95.20% as on September 2018,” the rating note said.