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12 S Kumars lenders mull legal action for default

A consortium of 12 lenders to cash-strapped apparel and fabrics major S Kumars Nationwide Ltd (SKNL) may soon take legal action against it and its defaulting marquee-suiting brand Reid & Taylor in order to recover overdue loans of Rs 3,000 crore, said a banker familiar with the matter.

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A consortium of 12 lenders to cash-strapped apparel and fabrics major S Kumars Nationwide Ltd (SKNL) may soon take legal action against it and its defaulting marquee-suiting brand Reid & Taylor in order to recover overdue loans of Rs 3,000 crore, said a banker familiar with the matter.

The consortium includes State Bank of India, ICICI Bank, Corporation Bank, Punjab National Bank and IDBI Bank.

While the S Kumars account continues to remain as a standard one (and not a non-performing asset or NPA) in the books of a few banks, it has slipped into the NPA category at others, another banker in the consortium told dna.

The timeline for the expected legal action, therefore, is still to be decided.

SKNL has been unable to go ahead with its expansion plans. It has not succeeded in getting Reid & Taylor listed yet. Its stock has fallen 75% in the last one year.

Corporation Bank, which has an exposure of Rs 75 crore to SKNL, will initiate action against SKNL soon, said the bank’s CMD Ajai Kumar after announcing the annual results on Wednesday.

The consortium, led by Bank of India, had extended working capital and project loans to SKNL against collateral of certain fixed and current assets. The consortium also has some SKNL shares pledged with it, apart from a personal guarantee from promoter and MD Nitin Kasliwal.

Uco Bank, in an effort to recover dues more than Rs 110 crore from Reid & Taylor, published a public notice in newspapers on Wednesday, asking the promoter to repay the outstanding debt.

“Despite repeated reminders, requests and persuasions, the said borrower has not liquidated the liabilities of the bank,” Uco Bank said in the notice.

Uco Bank has 35 acres and 16 guntas of land at Nanjangud in Karnataka and personal guarantee of Kasliwal as collateral.

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