Breaking the bank

It’s unbelievable that banks are restructuring corporate loans at a run rate of almost R4,000 crore a month, but the damage has been done. All they can do now is to make sure it’s not them alone who are bearing the pain. In this context, a core group of senior bankers has decided that any recast will require the promoters concerned to contribute their share of the load; so among other things, they must cough up a higher (25%) contribution of the diminution in the fair value of the account, and must also furnish unconditional personal guarantees.

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