PC Jeweller announced on July 15 that it has successfully secured approval from IndusInd Bank for its One Time Settlement (OTS) proposal. This decision was conveyed to the company via a letter dated July 15.
Terms of the Approved OTS
The approved OTS includes a combination of cash and equity components to settle the outstanding dues. Additionally, it involves the release of securities and mortgaged properties as per the agreed terms and conditions.
Previous Approvals and Background
Earlier, on July 7, PC Jeweller received approval from Punjab National Bank (PNB), a prominent member of the consortium of lenders to PC Jewellers, for its OTS proposal. This follows the acceptance of the OTS proposal by the State Bank of India (SBI) in April, marking a significant step towards resolving the company’s financial challenges.
Financial Troubles and Background
PC Jeweller faced financial distress starting February 2023, when banks initiated the recall of loans amounting to Rs 3,466 crore after the company defaulted on payments. According to its fiscal 2021-22 annual report, PC Jeweller had borrowed from 14 banks, including SBI, Indian Bank, Union Bank, and Punjab National Bank, with outstanding debts totaling Rs 3,278 crore, inclusive of interest and principal amounts.
Among the key lenders, SBI had the largest exposure with Rs 1,060 crore, followed by Union Bank of India with Rs 530 crore, Punjab National Bank with Rs 478 crore, and Indian Bank with Rs 226 crore outstanding.
