New Delhi/Mumbai: Jaypee Group, a heavily indebted infrastructure conglomerate, said on Saturday that no bank had approached it about classifying its loans as non-performing amid government pressure on lenders to rein in large money-losing borrowers.
The real-estate-to-road group, best-known as the builder of India`s Formula One racing track, had debts of around 670 billion rupees ($10 billion) as of February. It has been identified by banks as one of India`s most leveraged companies with worsening financial performance.
Credit Suisse said in February that Jaiprakash Associates, Jaypee`s flagship company, had failed to earn enough to cover its interest payments for 11 consecutive quarters.
The group has already made some asset sales to cut debt, the latest being a deal to sell its cement plants for 159 billion rupees, but at least one banker told Reuters on the condition of anonymity that lenders were on the verge of classifying its loans as non performing.
However, Rahul Kumar, the chief financial officer of Jaypee, denied its loans were turning bad and said that it was in talks with its lenders for rescheduling interest payments on two loans by Jaiprakash Power Ventures and Jaiprakash Associates.
"The account continues to be a standard account with all our lenders," he said by phone.
ICICI Bank, India`s biggest private sector lender and which counts Jaiprakash among its major clients, said last week it was working with the company to further reduce its debt load.
Government-controlled State Bank of India (SBI) is the other main lender for the company, which was founded in 1979 by civil contractor, Jaiprakash Gaur. Jaypee is one of the most visible Indian companies with high-profile projects including the country`s longest six-lane controlled-access expressway, which has sharply cut down the travel time between New Delhi and the Taj Mahal.
But the debt-fueled growth is now putting stress on companies like Jaypee and their lenders.
Struggling under mountains of bad debt, banks like SBI are under pressure from the government to chase up high-profile cases like tycoon Vijay Mallya, whose Kingfisher Airlines collapsed in 2013 leaving angry creditors who are owed more than $1 billion.
Prime Minister Narendra Modi told an election campaign rally last month no one "looting" money from banks would be spared.