Who wrote this article?

Deepak Shenoy, Capitalmind's research team.

Sterling Biotech Defaults, Biggest Ever

18 May 2012Deepak Shenoy1 min read

Quick Facts

What is "Sterling Biotech Defaults, Biggest Ever" about?
What category is this article in?: Stocks
Who wrote this article?: Deepak Shenoy, Capitalmind's research team.
When was this article published?: Published 18 May 2012.
How long does this article take to read?: 1 min read
What topics does this article cover?: STERLINBIO

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.