S Kumars lenders mull legal action against default

A consortium of 12 lenders of cash-strapped apparel and

fabrics major S Kumars Nationwide (SKNL) is considering legal action against it and its defaulting suiting brand Reid & Taylor in order to recover overdue loans of Rs 3,000 crores. 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. The timeline for legal action is yet 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 percent in the last one year. Corporation Bank, which has an exposure of Rs 75 crores to SKNL, will initiate action against SKNL soon, said the bank’s CMD Ajai Kumar after announcing the annual results.

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.

Meanwhile, Uco Bank, in an effort to recover dues more than Rs 110 crores from Reid & Taylor, published a public notice in newspapers, asking the promoter to repay the outstanding debt. Uco Bank has 35 acres and 16 guntas of land at Nanjangud in Karnataka and personal guarantee of Kasliwal as collateral.