Siva group companies look to settle dues with State Bank of India, others

Siva group offers Rs 81 cr to lenders

Companies owned by Chennai-based serial entrepreneur C Sivasankaran are close to signing loan settlement agreements with a slew of Indian banks led by the State Bank of India that would see these accounts becoming standard again.

Siva Industries & Holdings, WinWind Power Energy, Hi-Tech Housing Projects, and Sterling Agri Products will be paying settlement fees of Rs 81 crore to banks as against their dues of Rs 280 crore. As part of the deal, lenders will release its charge on the properties and other securities after the payment of the settlement amount.

This is the second settlement with the banks by the Siva group after it repaid IL&FS dues earlier this month. In July 2022, the IL&FS approved a one-time debt restructuring proposal by another group firm, Siva Shelters and Construction. SSCL has paid Rs 70 crore against outstanding dues of Rs 76.8 crore on January 2.

Of the sanctioned Rs 175 crore, IFIN, a subsidiary of IL&FS, had disbursed a loan of Rs 50 crore to the company, which was secured by way of an exclusive registered mortgage over about 17-acre land parcels in Chennai. The loan was classified as a non-performing asset (NPA) on May 30, 2019. After SSCL paid off the settlement amount, the mortgaged land will be released to the company.

A banking source said the settlement with banks expedited after the Supreme Court in June last year allowed banks to proceed with an offer of settlement submitted by the promoter of Siva Industries under Section 12A of the Insolvency and Bankruptcy Code (IBC). Section 12A allows a settlement of 90 per cent of the committee of creditors (CoC) agree to it. The top court reiterated that it made it clear earlier that as Section 12A passed constitutional muster, the commercial wisdom of the CoC should not face any judicial intervention.

The court said when 90 per cent or more of the creditors found it would be in the interests of the stakeholders to permit a settlement and withdraw the bankruptcy process, the adjudicating or the appellate authority could not sit in an appeal on this.

In the Siva Industries case, the CoC had cleared the settlement plan of promoter Vallal RCK, father of serial entrepreneur C Sivasankaran, with 94.2 per cent of the vote but the NCLT Chennai rejected it and sent the company for liquidation. The SC, however, intervened and ruled in favour of the lenders.

Clearing the book

• Siva Industries pays Rs 328 cr to banks under Section 12A of IBC
• SC clears promoter application under IBC for settlement in June, 2022
• SBI joins other banks for settlement 
• Siva Shelters pays Rs 70 cr to IL&FS early January