Strategic debt restructuring’ (SDR) is a new tool made available to banks and financial institutions by the Reserve Bank of India (RBI) in June 2015 for the recovery of non-performing assets (NPA). The joint lenders forum (JLF), a consortium of bankers and financial institutions, can take the SDR route to recover the loan extended to the company. The SDR scheme aims to revive stressed companies and provide an option to the JLF to initiate change of management in companies, which fail to achieve the milestones under Corporate Debt Restructuring (CDR). The JLF acquires the majority stake in the company by converting a part of the outstanding loan into equity. At a later date, it transfers the control to a…
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