IDFC Bank becomes the latest lender in the consortium to accept PC Jeweller’s one time settlement proposal

“The company had opted for OTS to settle the outstanding dues. The terms and conditions of accepted OTS include cash and equity components payable under settlement, release of securities and mortgaged properties etc,” PC Jeweller said in an exchange filing.

Over the past few weeks, PC Jeweller has been notifying sanctions/approvals by various banks to its one time settlement proposal.

During the firm’s quarter-ending March results announcement in May, PC Jeweller stated in its investor presentation that due to global factors such as COVID-19, the company faced a fall in its revenue and its accounts shifted to non-performing assets (NPA) category in June 2021 (which it has disputed legally).

This led to operational disruptions and liquidity constraints, it said. The company said it has been interested in finding a solution to its banking issues and thus submitted its resolution plan to its lenders, subsequently.

The resolution process could not be taken forward to its finality and the banks started the legal process towards recovery of their dues in January 2023. This again led to disruptions in its operations and consequent liquidity squeeze, it said.

During the third quarter of fiscal year 2024, the lenders agreed in-principle to take forward the settlement proposal to their respective internal authorities for approval. PC Jeweller said the internal authorities of three banks -- State Bank of India (lead bank), Karur Vysya Bank and Axis Bank – gave their acceptances to the firm’s offer in Q4FY2024. The offer is under consideration with the competent authorities of the remaining consortium banks, the firm had said back then.

Shares of PC Jewellers have gained over 79% since the beginning of the year. The stock has risen nearly 229% in the last one year.