Banks may have to classify Maytas Infra loan as bad asset

Mumbai: Banks may have to classify the Rs3,037 crore lent to Maytas Infra Ltd, the troubled infrastructure firm, as bad debt for the quarter ending 31 December and set aside money to cover it.
This is because of delays in sewing up a second corporate debt restructuring, or CDR, package that’s being negotiated by Maytas Infra’s new promoter Infrastructure Leasing and Financial Services Ltd (IL&FS). The first CDR lapsed because it was not implemented within the stipulated 120 days of it being finalized.
Typically, lenders relax repayment norms and give more time to a distressed borrower to repay and even bring down interest rates to help it tide over hard times.
Axis Bank Ltd, one of the lenders, has already classified the debt to Maytas Infra as a non-performing asset, or NPA. A senior official from the bank refused to disclose how much it had lent to the troubled infrastructure company, but confirmed that it has already classified this exposure as an NPA and provided for it. “We classified it as NPA in September,’’ said this official, who spoke on condition of anonymity.
Maytas, promoted by the family of B. Ramalinga Raju, has been in trouble since he confessed to the country’s biggest accounting fraud at his software firm Satyam Computer Services Ltd in January.
09/12/09 Anita Bhoir/Live Mint

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Categories: Airports Dec 2009