Indications that only one per cent rated companies are interested in debt restructuring

Mumbai, Ta. Thursday, November 19, 2020

According to a report, only one per cent of India's rated companies have shown interest in the one-time debt restructuring scheme, given the improving business mood and the phased recovery in the country's economy.

In August this year, the Reserve Bank of India (RBI) announced a one-time debt restructuring scheme for companies under pressure due to Kovid-18. RBI to indicate the standards for this scheme. V. Kamath appointed the committee.

According to a report prepared by Crisil, an analysis of eight companies other than its rated MSMEs found that 9 per cent did not want to take advantage of the restructuring scheme.

Only one per cent of companies indicated they intended to take advantage of the restructuring. As per the norms laid down by the Kamath Committee, 5 per cent of these companies are eligible for the benefit of restructuring.

The business sentiment in the country has been improving over the last one-two months and a huge recovery is expected in the next financial year, which is why companies are now considering taking advantage of the restructuring.

The credit profiles of the companies benefiting from the restructuring will be put at risk. Banks will have to decide on the application for restructuring and implement it by the end of December.