Bombay Rayon plans strategies to lessen debt burden

Hit by global recession, Bombay Rayon Fashions is

taking measures to reduce its debt burden. The company which has brands such as Vero Moda and Jack & Jones under its portfolio has appealed to its lenders to convert 10 per cent of the total loan into equity to get rid of about Rs 4,100 crores debt.

As per sources, the company submitted a debt restructuring proposal to the lender including a consortium of 24 banks to convert Rs 410 crores debt into equity along with extending the tenure of the loan by 10 years and lower the interest rate to 10.5 per cent from 13-14 per cent charged earlier. However, the banks have not taken a decision on the matter as yet.

While State Bank of India has the largest amount of loan share at Rs 1,100 crores, or 34 per cent, of the total debt, followed by Axis Bank at Rs 470 crores, or 11 per cent, the company owes Rs 340 crores to State Bank of Patiala and Rs 220 crores each to Exim Bank and Punjab National Bank. But the request by company would mean the lenders will have to forego Rs 262 crores of the total amount due.