Electrosteel gets nod from lenders to restructure Rs. 6,000cr loan - Angel Broking

Media reports suggest that Electrosteel castings' associate Electrosteel Steels has approached its lenders to recast its Rs. 6,000cr loan. The Lenders have in-principle agreed to restructure the company's loan, a move that will give Electrosteel more time to repay its dues. The lead bank would now refer the loan to the corporate debt restructuring (CDR) cell in June 2013. According to this scheme the lenders will have to sacrifice close to Rs. 1, 000cr, while the company will have to infuse about Rs. 200cr. This move is positive for Electrosteel steels since it will help reduce some amount of debt and interest cost. However, this will make it difficult for the company to raise funds in future.

We maintain our Buy view on Electrosteel castings with a target price of Rs. 26.

Source : Equity Bulls

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