The lender is refusing to release collateral securities, demanding additional dues and penal interests
Singapore-based Green Grid Group's efforts to restructure the debt of its Indian subsidiary have been hindered by UCO Bank, its lender.
The owner of Chennai One IT SEZ (special economic zone) is consolidating its debt by transferring it to Punjab National Bank and other lenders, but the move is facing hurdle as UCO Bank, one of its current bankers, is refusing to release collateral securities, demanding additional dues and penal interests, sources told DNA Money.
Promoted by Chennai-based Unnamalai Thiagarajan along with Elnet Technologies, Green Grid Group Pte, through its wholly-owned Indian subsidiary IG3, owns Chennai One IT SEZ and a disaster recovery data centre in Bengaluru.
While Chennai One, with a constructed area of 1.2 million square feet, has been operational since 2006 with full occupancy, IG3 has been ailing with poor revenues and widening losses coupled with a high debt burden.
Moreover, IG3 has overdue interest obligation on term loan amounting to Rs 31.79 crore which has not been provided as on FY16, rating firm CARE has noted, and that is is one of the factors why the company continues to be in the default category, failing to service debt in time due to stressed liquidity positions.
In a bid to consolidate most of its loans and to reduce the cost of borrowings, IG3 decided to retire substantial loans due and outstanding to various lenders including UCO Bank by obtaining lease rental discounting facility of Rs 1,125 crore from Punjab National Bank, Punjab National Housing Finance (PNBHF) and Union Bank of India.
For this, the company approached UCO Bank for settlement of its dues and asked the bank to issue an NOC certifying that once the outstanding is paid off, UCO would release all securities in favour of PNB, PNBHF and Union Bank.
UCO Bank issued an NOC in October following which PNB settled the Kolkata-headquartered bank’s outstanding of Rs 234 crore.
But even after issuing an NOC and then getting the settlement from PNB, UCO Bank refused to release the securities claiming that it has mistakenly omitted to add outstanding of Rs 7.75 crore including penal interest of Rs 1.75 crore.
IG3 has, however, disputed this claim.
Madras High Court has now asked the company to issue bank guarantee for the disputed amount and directed UCO Bank to release the securities and the title deeds once such guarantee is received.
As issues with UCO Bank are likely to get sorted out now that IG3 has moved court, the IT sector’s financial woes are likely to end partially soon.
THE TUSSLE CONTINUES
- The lender is refusing to release collateral securities, demanding additional dues and penal interests
- The bank has claimed that it mistakenly omitted to add outstanding of Rs 7.75 crore including penal interest of Rs 1.75 crore
- Madras High Court has now asked the company to issue bank guarantee for the disputed amount and directed UCO Bank to release the securities and the title deeds once such guarantee is received
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