CG Power locks in at upper circuit as lenders agree for loan restructuring

The lenders to CG Power agreed a one-time loan restructuring by accepting a one-time settlement and restructuring of debt. Reacting to the news, shares of the company gained by 4.96 per cent locking in at its upper circuit at Rs 36 per share.

Previously Tube Investments India (TIIL) had agreed to invest Rs 700 crore in CG Power for a 56.61 per cent stake subject to satisfactory fulfilment of conditions precedents contained in Securities Subscription Agreement (SSA). One of the conditions included that the lenders of CG Power accept one-time settlement and restructure the funded facilities and guaranteed debt in accordance with the terms of the binding offer made by TIIL to CG Power and the lenders in a way that is mutually acceptable.

The agreement provides for lenders to be paid an upfront amount of Rs 650 crore and additionally, Rs 200 crore of debt will be converted into non-convertible debentures that will have a tenure of five-year. Thus, the takeover of CG Power by Murugappa Group’s TIIL has become more easy. CG Power is expected to be debt free in five-years.