From Bloomberg (HT Reader Atul Mittal on my original post):
Sterling Biotech Ltd. (SLT), a gelatin maker based in Mumbai, didn’t pay $184 million of convertible notes that matured yesterday, the biggest missed payment by an Indian company on debt that can be swapped for shares.
The company is negotiating a new repayment schedule with investors, according to a person familiar with the matter, who confirmed the non-payment and asked not to be identified because the details are private. Sterling has hired Avista Advisory Associates Pvt. and Houlihan Lokey, a U.S. investment bank, to advise on the restructuring, the person said.
Sterling is the third Indian company to miss a convertible bond repayment this year, after Hotel Leela Venture Ltd. and Murli Industries Ltd., according to data compiled by Bloomberg. Companies in the South Asian nation need to repay a record $5.3 billion of convertible securities in 2012, the data show.
Oh, and the company has even defaulted on local loans: SBI has taken them to court for non-payment.
I wonder what starts now. FDI is pretty much good bye if this situation isn’t resolved fast, and the hit to local lenders too will start to hurt. Banks are a dangerous buy right now, but so are anyone who’s ever borrowed abroad.
