Share Microfin gets Rs 1,200 cr debt restructuring deal

In a big respite, Hyderabad-based microlender Share Microfin today said 31 bankers, led by SIDBI and ICICI Bank, have agreed to restructure loans worth Rs 1,200 crore given to it.

The agreement for corporate debt restructuring (CDR) gives Share a year’s moratorium on repayments on principal and the loans will be restructured over a seven-year period, said Udaia Kumar, the microlender’s Managing Director.

Interest on the outstanding loans has been fixed at 12 percent, he said, adding a committee of five top banks will now monitor the company on a regular basis.

[caption id=“attachment_95830” align=“alignleft” width=“380” caption=“Small Industries Development Bank of India’s (SIDBI) share is at Rs 350 crore, while ICICI Bank’s exposure is Rs 217 crore. Reuters”]  [/caption]

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Share’s total debt stands at Rs 1,900 crore, of which Rs 1,200 crore has been restructured and the remaining Rs 700 crore is held by lenders in the form of preferential shares with conversion rights, Kumar said.

Small Industries Development Bank of India’s (SIDBI) share is at Rs 350 crore, while ICICI Bank’s exposure is Rs 217 crore, he said.

“The CDR package gives us an opportunity to survive,” Kumar said.

Microfinance institutions (MFIs) have been having a difficult time for around a year now, ever since problems erupted in their largest market, Andhra Pradesh.

Some borrowers allegedly committed suicides due to strong-arm tactics of recovery agents, which prompted the Andhra Pradesh Government to enact a legislation last year to control MFIs.

PTI