Sintex Industries fraud: Public sector banks may take Rs 6,000 crore from it

Mumbai: Sintex Industry on the verge of sinking. Public sector banks face a hit of close to Rs 6,000 crore on account of their exposure to Sintex Industries. This has been classified as a fraud by Punjab National Bank, the large lender to the company. The banks have already classified the account as a non-performing asset, they will now have to make full provision for the loan within four quarters which is the requirement for fraud accounts.

Punjab National Bank on Wednesday had informed the stock exchanges that, Sintex Industries’s Rs 1203 crore is a fraud. “A fraud of Rs 1203 crore is being reported by the bank to RBI in the accounts of the company (SIL). The Dena Bank and Vijaya Bank are consolidated togehter makes it 949 crore. Union Bank of India has a Rs 371 crore exposure which rises to Rs 621 when merged with Andhra Bank. Bank of India has a Rs 614 crore loan facility followed by Canara BankRs 472 crore, Exim Bank (Rs 416 crore), Punjab & Sind Bank (Rs 333 crore), Central Bank of India (Rs 315 crore) Oriental Bank of Commerce (Rs 300 crore), Andhra Bank (Rs 250 crore). SBI has a term loan of around Rs 150 crore. Of the private lenders, South Indian Bank has the largest exposure (Rs 250 crore) followed by Karnataka Bank (Rs 100 crore) and IDBI Bank (Rs 92 crore) as per the report by Brickwork Ratings.

The company had first defaulted on debt obligations which were reported to the stock exchanges in 2019. In January 2020, SIL had informed the stock exchanges that PNB had filed a petition in the National Company Law Tribunal to initiate an insolvency resolution process for Rs 1078 crores. Since May 2019, the company failed to cooperate with rating agencies which had classified the borrower as a defaulter. According to a report by Brickwork Ratings on April 17, banks have an exposure of Rs 6,586 crore of which fund-based exposure was Rs 5,536 crore.

The company reported a loss of Rs 707 crore on revenues of Rs 150 crore imnfirst quarter. The company said that it has $13.5mn of foreign currency convertible bonds outstanding and has defaulted in interest payment on these bonds. It has also defaulted in repayments of non-convertible debentures amounting to Rs 500 crore. The company cited the pandemic the reason for defaulting along with time and cost overrun in completion of its projects, reduction in subsidies and incentive benefits with delay in disbursements.

SIL a Gujarat based Company, is a leading textile manufacturer, SIL’s Textiles Division focuses on niche products and specializes in men’s structured shirting for the premium fashion industry. Textiles plants are located in Kalol and Amreli, Gujarat.

Leave A Reply

Your email address will not be published.