Arvind Mills fails to repayment interest

Textile major, Arvind Mills do not seem to be away from the difficult times faced by most big conglomerates across the globe. Arvind has defaulted to pay its interest payments to the lenders in the month of January.
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The defaults resulted despite of banks such as State Bank of India, Bank of Baroda and others are restructuring loans given to Arvind. This is first time in the last four years that the denim manufacturer has failed on its repayment to the term lenders. A unit of the company, Arvind Products has defaulted on payments to IDBI Bank.
Besides, Credit rating agency Crisil does not think that Arvind would be able to clear all its debt that are outstanding for this month and are considered for rescheduling.
Crisil has already has reduced the rating of Arvind and its subsidiary by three mark to ‘default' category' on the backdrop of the concern that the internal sources are not sufficient to meet the requirements due to a week business atmosphere. The ratings on the bank loan facilities of Arvind have been downgraded to ‘D/P5'from ‘BBB-/Negative/P3'.Crisil Senior Director Raman Oberoi said, "Both Arvind and Arvind Products have paid their dues till December and are in the process of re-scheduling their loans. The textile industry is under pressure and we have downgraded Arvind due to ‘timelessness' of the payments."
An instrument is given a ‘D' rating if it defaults or is expected to default on the payment date while P5 rating indicates that the instrument is anticipated to be in default on maturity or is in default.
However Arvind officials said that its lenders, including SBI has approved the rescheduling of loan repayments. The other lenders like Bank of Baroda, UCO Bank and ICICI Bank have also approved for rescheduling term loan payment worth Rs 15 crore each for January and February 2009. SBI has intimated the rating agency about its approval on rescheduling.
Deputy Chief Financial Officer of Arvind, Milan Shah said, "Arvind had sought lenders' approval for rescheduling of loans for January 2009 in the last week of December 2008 itself. Crisil has erred in downgrading even after our lead bank intimated the agency about the approval."
Meanwhile Arvind had not been referred to corporate debt restructuring (CDR) scheme as banks had already decided on loan restructuring, said a senior official at IDBI Bank.
Arvind Mills that was set up in 1931 is owned Sanjay Lalbhai.
Source; http://www.rupeetimes.com/news/personal_loan/arvind_mills_fails_to_repayment_interest_2144.html