MT Educare Defaults on ₹32.33 Cr Principal and Interest Payments
MT Educare Limited defaults on ₹32.33 crore of principal and interest payments to Prudence ARC and Axis Bank. The company is undergoing Corporate Insolvency Resolution Process since December 16, 2022. Corporate guarantees have also been invoked against the company.
Defaults on loan repayments and being under corporate insolvency resolution process significantly impact the company's financial health and operations.
The company is disclosing defaults on principal and interest payments, which is a negative financial event.
MT Educare Limited has disclosed defaults on the repayment of principal and interest amounts for term loans, overdraft, and corporate guarantees. The company reported a current default amount of ₹16.44 crore in principal and ₹3.75 crore in interest to Prudence ARC, and ₹7.65 crore in principal and ₹4.51 crore in interest to Axis Bank Limited.
The total outstanding borrowings from banks and financial institutions amount to ₹32.33 crore. The company has outstanding term loans with Axis Bank Limited (₹7.16 crore, 11.65% interest, secured) and an overdraft facility (₹4.98 crore, 11.20% interest, secured). Additionally, Prudence ARC has an outstanding amount of ₹20.19 crore with a tenure of 2 years and an interest rate of 13.75%, secured.
The company is currently under Corporate Insolvency Resolution Process (CIRP) since December 16, 2022, as per the NCLT order. The defaults are in accordance with claims received from Secured Financial Creditors. Furthermore, corporate guarantees have been invoked against the company for ₹7.3 crore with Axis Bank Ltd for Sri Gayatri Education Society and ₹16.69 crore with Prudence ARC for Lakshya Forum for Competitions Private Limited.
Previously, loans were held by Assets Care & Reconstruction Enterprises Limited and reassigned to Prudent ARC Limited. Shamrao Vithal Co-op Bank Ltd (SVC) submitted a claim of ₹49.72 crore for a corporate guarantee, which was rejected as the guarantee was not invoked before the insolvency commencement date. SVC Bank's appeal against the dismissal of their IA before the Hon’ble NCLT, Mumbai, is pending at NCLAT.
What to do with a filing like this
MT Educare Limited filed this with the NSE as a statutory disclosure, categorised under fraud/defaults disclosure. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by MT Educare Limited. Read the original for the full detail.