Decision process
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Decision process Decisions in the CDR system are taken on basis of PowerPoint PPT Presentation


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Decision process Decisions in the CDR system are taken on basis of super majority where 75% of lenders by value and 60% of lenders by number have to agree. The mechanism is based on Inter Creditor Agreement signed by all member Banks and Debtor Creditor Agreement signed by the Borrower.

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Decision process Decisions in the CDR system are taken on basis of

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Decision process decisions in the cdr system are taken on basis of

Decision process

Decisions in the CDR system are taken on basis of

super majority where 75% of lenders by value and

60% of lenders by number have to agree.

The mechanism is based on Inter Creditor Agreement signed by all member Banks and Debtor Creditor Agreement signed by the Borrower.


Decision process decisions in the cdr system are taken on basis of

Stand-still Period

Lenders & borrowers not to initiate or proceed

with civil suit

Not to approach any authority for any relief

Directors not to resign.

Documents stand extended.

Status quo ante for asset classification if package

approved & implemented within 120 Days.


Decision process decisions in the cdr system are taken on basis of

Outline of the Process

Submission of Flash Report – scrutiny to ensure

benchmarks and admission of the case by Empowered

Group.

Appointment of Monitoring Institution (MI) & members

of Monitoring Committee (MC)

Conduct of Joint Lenders Meet (JLM) for finalization of

Restructuring Package

Approval of Final Restructuring Package by EG.

Execution of Master Restructuring Agreement and

Trust & Retention Agreement.


Decision process decisions in the cdr system are taken on basis of

Timeline

Initial scrutiny for Flash Report max 30 days

Approval of Flash : Next EG Meeting

Approval of Final Package 60/ 90 days

Issue of LOA: After confirmation of minutes

Approval by individual lenders : 45 days Package

Implementation by all : 120 days


Decision process decisions in the cdr system are taken on basis of

Components of Restructured package

Within overall regulatory guidelines applicable, each package is tailor made to suit the corporate needs. Generally the package may involve concessions in rate of interest, modification in repayment schedule, carving out irregularity in Working Capital into WCTL, Funding of Interest, conversion of debt to equity or other debt instruments.


Decision process decisions in the cdr system are taken on basis of

Additional Finance

Additional Finance, if any, to be provided by CDR lenders or all lenders on pro rata basis.

Preferential claim with respect to cash flows in respect of additional exposures.

Waterfall Mechanism is embedded in the MRA and TRA

Asset classification benefits for additional exposures as per extant regulatory guidelines.

Sharing additional finance compulsory only in Category I cases.


Decision process decisions in the cdr system are taken on basis of

Requirements from Borrower

Enhanced security by way of Guarantee of promoter, Pledge of shares.

Promoters’ contribution 20% of lenders’ sacrifice or 2% of restructured debt, whichever is higher.

Restrictions on expansion, capex, dividends etc.


Decision process decisions in the cdr system are taken on basis of

Key Financial Benchmarks

DSCR - 1.25:1

Return on Capital Employed – 5 year G sec + 2%

Gap between IRR and cost of capital – at least 1%

Loan Life Ratio – 1.40

Break-even analysis – in line with industry

Industry indicators – EBIDTA, price realization,etc


Decision process decisions in the cdr system are taken on basis of

Exit from CDR

Exit from CDR is triggered on

Completion of restructuring period

Financial performance of the borrower is 25% more

than EBIDTA projections for 2 consecutive years.

Upon Exit, Recompense has to be paid by the Corporate for the sacrifices made by the lenders, as per CDR guidelines.


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