CVR Rajendran, CMD of Andhra Bank said the bank is mulling many options to deal with the exposure of Rs 1500 crore. If the company's CDR plans go through, the bank is willing to refinance the loan by extending the period of repayment.
With reports doing the rounds that Bhushan Steel is seeking restructuring of its loan involving an amount of Rs 20,000 crore. CNBC-TV18 speaks to Andhra Bank which has exposure to both Bhushan Steel and Bhushan Steel and Power.
CVR Rajendran, CMD of Andhra Bank said the bank is mulling many options to deal with the exposure and if the company's CDR plans go through, it is willing to refinance the loan by extending the period of repayment. However, the other options to recover Rs 1500 crore loan include selling/leasing some assets of Bhushan Steel, he said.
Below is the transcript of CVR Rajendran's interview with Anuj Singhal and Ekta Batra on CNBC-TV18.
Ekta: We do have some reports indicating that there could be restructuring of Bhushan Steel's loan which the consortium of bankers have given to them to be restructured possibly under the 5:25 rule. We wanted to get your sense in terms of whether you have exposure to Bhushan Steel and whether what the developments are if you could apprise us of it?
A: Exposure to Bhushan Steel as well as Bhushan Steel and Power, both the companies have very good asset base but their leverage is little on the higher side. Today the industry is not doing well, global prices are low and their EBITDA margins have come down a lot. They are not able to service loans which they have taken and we are not given corporate debt restructuring (CDR) for these companies. So, now the companies are thinking about the possibility of taking a CDR. If it goes through, it is being discussed, we will refinance these entire loans elongating the period of repayment; that is a possibility.
Andhra Bank stock price
On March 18, 2015, at 14:08 hrs Andhra Bank was quoting at Rs 81.25, up Rs 1.65, or 2.07 percent. The 52-week high of the share was Rs 110.00 and the 52-week low was Rs 57.25.
The company's trailing 12-month (TTM) EPS was at Rs 9.18 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 8.85. The latest book value of the company is Rs 148.19 per share. At current value, the price-to-book value of the company is 0.55.
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