Bangalore: Deccan 360, the now-grounded air cargo business started by low-cost civil aviation pioneer G R Gopinath, is understood to be on the verge of referral to the corporate debt restructuring scheme formed under the guidelines of Reserve Bank of India (RBI).
The company is understood to have run up a debt of around Rs 500 crore. Axis Bank has an exposure of Rs 200 crore, State Bank of India of Rs 160 crore and the rest is from Syndicate Bank and some others.
Deccan 360 was started in mid-2009. It has been grounded from early this year, as the volumes did not pick up enough to sustain operations. It had raised Rs 115 crore equity investment from Reliance Industries during early 2010, with a commitment to invest more as operations expanded. With the operations not going according to plan, RIL stopped its investments and is understood to have expressed willingness to exit or pare its stake.
According to investment bankers, RIL has since structured a transaction to move its investment in Deccan 360 to RIL chairman Mukesh Ambani’s personal investment portfolio.
According to senior bankers who have been in discussion with Gopinath, the decision to refer Deccen 360 to the CDR cell has been taken and the papers are being readied. There are guidelines from RBI on the process; an empowered committee decides on the viability of the company and spells out a debt restructuring schedule. For infrastructure companies, a maximum of 10 years is granted; it is seven years for non-infra players. During late 2010, Kingfisher Airlines went through the CDR scheme to restructure as much as Rs 1,300 crore of a Rs 7,000 crore debt.
09/11/11 Raghuvir Badrinath/Business Standard
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