Sadbhav Engineering Limited has executed a Master Restructuring Agreement (MRA) with consortium lenders to restructure its debt obligations worth ₹1,516.71 crores. The agreement, signed on March 25, 2026, represents a significant step in the company's financial restructuring plan prepared in accordance with the Reserve Bank of India's stressed assets restructuring framework.

Regulatory Filing and Compliance

The company has formally notified both BSE Limited and National Stock Exchange of India Limited about the MRA execution through a regulatory filing dated March 26, 2026. The intimation was made pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015, ensuring full compliance with disclosure requirements. The filing was signed by Shashin Patel, Chairman & Managing Director, confirming the company's commitment to transparency with stakeholders and regulatory authorities.

Agreement Details and Participating Lenders

The MRA has been executed with IDBI Trusteeship Services Limited acting as security trustee and debenture trustee, along with six major lending institutions:

The agreement includes provisions for additional lenders to accede to the MRA at a later date, ensuring comprehensive participation from the lending consortium.

Financial Structure and Debt Composition

The restructuring plan covers total debt aggregating to ₹1,516.71 crores, with a specific breakdown of exposure types:

The fund-based exposure of ₹906.35 crores will be restructured as non-convertible debentures, providing a structured approach to debt management and repayment.

Key Terms and Lender Rights

The MRA establishes several important provisions that grant specific rights to the lending consortium:

Historical Context and Agreement Evolution

The MRA builds upon a series of previous agreements dating back to 2008. The restructuring encompasses various underlying loan agreements, including the original loan agreement from March 18, 2008, and multiple supplemental working capital consortium agreements from 2010, 2011, 2016, 2018, and 2021. This comprehensive approach addresses the evolution of the company's financial obligations over more than a decade.

Implementation Framework

The agreement has been structured in compliance with RBI's stressed assets restructuring framework and SEBI regulations. The issuance price for equity conversions will be determined in accordance with RBI guidelines and SEBI regulations. The MRA does not provide for fresh funding but focuses on restructuring existing debt obligations while maintaining operational continuity and providing a structured path for financial recovery.

Sadbhav Engineering Limited announced its unaudited financial results for the quarter and nine months ended December 31, 2025, showing mixed performance with reduced losses but ongoing financial challenges. The infrastructure company's Board of Directors approved the results at their meeting held on February 14, 2026.

Financial Performance Overview

The company's standalone financial performance for the quarter showed improvement in loss reduction despite operational challenges.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, the company demonstrated significant improvement in financial metrics compared to the previous year.

Exceptional Items and Asset Monetization

The company reported exceptional items of ₹1,130.60 lakhs for the quarter, primarily consisting of profit on sale of assets. This reflects the company's ongoing asset monetization strategy as part of its debt restructuring plan.

Operational Challenges and Going Concern

The company continues to face significant operational and financial challenges. Key issues include:

• Difficulties in meeting payment obligations to suppliers and statutory authorities
• Delays and defaults in loan repayments
• Classification as Non-Performing Asset (NPA) by most lenders
• NCLT application filed by one lender under Section 7 of the Insolvency and Bankruptcy Code, 2016

Debt Restructuring Progress

Management has submitted a comprehensive restructuring plan to the consortium of lenders, which includes:

• Monetization of HAM and other assets
• Infusion of funds by promoters
• Cash flows from the Gadag Project
• Receipt of claim amounts from arbitration settlements
• Collection of receivables and refinancing of operational projects

The Lead Bank has already conveyed its sanction for the Debt Restructuring Plan, with other member banks currently seeking approval from their respective authorities.

Auditor Qualifications

The statutory auditors have expressed qualified opinions on several matters, including:

• Contract assets of ₹35,019.32 lakhs related to closed/suspended projects
• Outstanding loan and receivables of ₹20,178.30 lakhs from step-down subsidiary RPTPL
• Non-compliance with Section 203 of the Companies Act, 2013 due to absence of Chief Financial Officer since April 8, 2024

Despite these challenges, management remains confident about the company's ability to continue operations based on the expected approval of the restructuring plan and anticipated asset monetization proceeds.