PC Jeweller One Time Settlement Proposal Accepted By SBI

In a major relief to PC Jeweller, State Bank of India (SBI) has accepted the One Time Settlement (OTS) proposal submitted by the company, as per the disclosure made by the company to the stock exchanges on 13 March.

The terms of the out-of-court settlement (OTS) proposed by P C Jewellers include a cash and equity component, release of securities and mortgaged properties. This development is significant as the company has been in talks with lenders led by SBI for a long time regarding the settlement. The company owes over Rs 3400 crores to a clutch of lenders. 

PC Jeweller's troubles began in February 2023 when banks decided to recall loans advanced to it. This was because it was revealed in a filing that the company had defaulted on loans worth Rs 3,466 crore from banks and financial institutions. Loan recall is a process where the source lender requests the return of the amount advanced to the recipient or borrower. 

The company, in its annual report for fiscal year 2021-22, stated that it had borrowed money from 14 banks, including SBI, Indian Bank, Union Bank and Punjab National Bank. In the annual report, the company said it owed the banks Rs 3,278 crore, which included the interest and the base amount.

The following banks have the highest outstanding loans: SBI with Rs 1,060 crore, Union Bank of India with Rs 530 crore, Punjab National Bank with Rs 478 crore, and Indian Bank with Rs 226 crore.