Vanik Inc. is in talks with a foreign investor to restructure its balance sheet and fend off bankruptcy proceedings to recover Rs. 4.4 bn in debt. Vanik Inc. is in talks with a foreign investor to restructure its balance sheet and fend off bankruptcy proceedings to recover Rs. 4.4 bn in debt. The ailing merchant bank was shown a wind up notice by Trustees last week, after failing to honour interest payments for its Rs. 300 mn unsecured debenture.
But Vanik is fighting on. “We are down, but we are not out…yet,” Vanik chief Justin Meegoda says.
Meegoda and his team have batted on a weak wicket since Vanik suffered a liquidity crunch in 1999.
When the hurricane struck, debts had piled up to around Rs. 11 bn. Vanik has since progressively sold off assets, to bring the debts down to Rs. 4.4 bn.
Some of Vanik’s creditors have also agreed to partly shave off Rs. 1.5 bn in interest payments.
“Nothing is firm yet, but we should get around 500 million rupees waived off interest payments,” he said.
The debt stock includes around Rs. 600 mn owed to cooperative banks, who are regularly repaid under various restructuring plans.