PC Jeweller Strikes ₹2,250 Cr Debt Deal with SBI-Led Lender Group

PC Jeweller has agreed on a one-time settlement (OTS) with a group of lenders, led by the State Bank of India (SBI), to clear its debt. The company will pay ₹2,250 crore to the banks, which includes both cash and shares in the company.

This offer represents a 20% reduction from the original principal amount of ₹2,900 crore, and covers 64% of the total dues, including interest, which amount to ₹3,500 crore.

In the past month, PC Jeweller informed the stock exchanges that six out of the 14 banks have accepted the OTS proposal. These banks are Union Bank of India, SBI, IndusInd Bank, Punjab National Bank, Karur Vysya Bank, and Axis Bank. Each bank will need to get separate internal approvals for this transaction, and the process is expected to be completed within the next three to four months. Once completed, the banks will own about 10% of PC Jeweller after receiving shares as part of the settlement.

According to the proposed deal, about 10% of the settlement amount will be paid upfront in cash. The remaining amount will be a combination of company shares and deferred cash payments, including interest based on SBI’s marginal cost of lending rate (MCLR), payable over two to three years. This arrangement gives the banks some potential future benefits.

A spokesperson for PC Jeweller said that the settlement process is ongoing, and the company hopes to finalise it soon but cannot provide further comments at this time.

The list of lenders also includes Indian Bank, Bank of India, Canara Bank, Kotak Mahindra Bank, Indian Overseas Bank, IDBI Bank, IDFC First Bank, and Bank of Baroda. SBI had started insolvency proceedings against PC Jeweller in July 2023 due to loan defaults but withdrew the petition in April 2024 after reaching a settlement. SBI is the largest creditor, with dues of about ₹1,180 crore.