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Pipavav’s CDR: Promoter contribution around Rs 190 cr

There will also be a relaxation in the interest payment. Nearly 14 percent is the current rate of interest for Pipavav Defence repayment which has been brought down to about 11 percent.

It was a big relief for  Pipavav Defence after lenders gave thumbs up to its Corporate Debt Restructuring (CDR) package. As per the package, the company will get a two year moratorium in the first two years which means both the term loan as well as the working capital finance interest payments will be borne by the lenders of the consortium.

Also, the repayment of the entire Rs 7,500 crore loan will be stretched over a period of eight years and so, there is a 10-year repayment cycle for Pipavav Defence.
 
There will also be a relaxation in the interest payment. Nearly 14 percent is the current rate of interest for Pipavav Defence repayment which has been brought down to about 11 percent.

The approval for this CDR package was very important for Pipavav not just because of its mounting debt of Rs 7,500 crore on the books and an additional Rs 4,500 crore from the unsecured funding going up to Rs 12,000 crore, it is a huge amount, easily one of the largest cases in the CRD cell referred this year.

The other reason why the CDR approval is very important is because it was one of the key conditions for its deal with Reliance Infra to go through and now with the CDR approval, Nikhil Gandhi will be able to put forward the promoter contribution which is pegged at about Rs 190 crore for the implementation of the CDR package.

There are 23 banks that have an exposure to Pipavav. The largest one is  IDBI Bank and the others include SBI , Central Bank , Union Bank .

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