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Union Bank of India approves one-time settlement offer from PC Jeweller 

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Union Bank of India approves one-time settlement offer from PC Jeweller 
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The approved settlement terms include a combination of cash and equity payments, alongside the release of securities and mortgaged properties  

Mumbai: In a significant development, Union Bank of India, a key member of the consortium banks of PC Jeweller, has officially approved the One Time Settlement (OTS) offer submitted by the company. This decision, conveyed via a letter dated June 15, 2024, underscores Union Bank of India’s role as the second largest bank after State Bank of India in terms of exposure to PC Jeweller. 

PC Jeweller opted for the OTS to resolve its outstanding dues with the bank. The approved settlement terms include a combination of cash and equity payments, alongside the release of securities and mortgaged properties as outlined in the agreement. 

Earlier this year, PC Jeweller said its board approved a proposal to raise Rs 2,000 crore through rights issues and preferential allotment of fully convertible warrants. The board in a meeting held two months ago also approved a proposal to increase the authorised share capital and alteration in the capital clause of the memorandum of association, a regulatory filing said.  

Additionally, the company said the board approved raising up to Rs 500 crore through a preferential allotment of fully convertible warrants. “The proceeds of the preferential issue will be utilised towards the payment of financial liabilities of the company, subject to the approval of the consortium of the lenders,” the company said. The company’s accounts have been classified as non-performing assets (NPA) with its lenders since June 2021, including the State Bank of India, and lenders initiated legal proceedings for recovery of dues. Till December 2023, the company had 55 owned and seven franchise stores. Three stores of the company located in Delhi remain temporarily shut due to ongoing court proceedings. 

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