Sadbhav Engineering Limited signed a Deed of Accession to its Master Restructuring Agreement (MRA) with State Bank of India and ICICI Bank on August 25, 2026. The agreement brings these two major lenders under the existing resolution plan for the company’s debt restructuring.

The accession covers a total debt exposure of ₹194.93 crore, comprising a fund-based exposure of ₹167.86 crore and non-fund based limits of ₹27.07 crore. Under the terms of the restructuring, the fund-based exposure will be converted into non-convertible debentures (NCDs).

Restructuring Terms and Governance

The MRA, originally signed in March 2026 with a majority of consortium lenders, now formally includes SBI and ICICI Bank as assenting lenders. The restructuring framework aligns with the Reserve Bank of India’s guidelines for stressed assets.

Key governance and financial terms include:

• Lenders have the right to appoint nominee directors to the board.
• A portion of the interest component on the proposed debentures will be converted into equity for the lenders.
• Promoter debt, both existing and any additional infusions, is obligated to be converted into equity.

What the Numbers Show

The restructuring involves a significant shift in capital structure rather than fresh funding. With ₹167.86 crore of the total ₹194.93 crore exposure classified as fund-based, over 86% of the restructured debt represents actual cash outflows that are now being converted into NCDs. This conversion, coupled with the mandatory equity conversion of promoter debt and interest components, indicates a substantial dilution event for existing shareholders while reducing immediate cash repayment pressures for the company.

Consortium Details

The Deed of Accession was executed by Sadbhav Engineering Limited, IDBI Trusteeship Services Limited (acting as security and debenture trustee), and the following lenders:

The underlying loan agreements date back to March 18, 2008, with multiple supplemental agreements added through August 2021. Existing security held by the consortium will be extended to secure the new debentures. The issuance price for equity conversions will be determined in accordance with RBI guidelines and SEBI regulations.

Catalyst Trusteeship Limited has disclosed an encumbrance over 1,83,50,000 equity shares of Sadbhav Engineering , representing 10.70% of the company's total voting capital. The disclosure, submitted to BSE Limited and the National Stock Exchange of India Limited on July 21, 2026, confirms that the trustee continues to hold these shares as an agent for debenture holders following a debt restructuring exercise.

The shares in question were originally pledged in favour of the debenture trustee for non-convertible debentures issued by Sadbhav Infrastructure Project Limited. The pledge was invoked on September 10, 2025, with an initial disclosure made to the exchanges on September 11, 2025. Under the terms of the restructuring, Catalyst Trusteeship Limited will hold and deal in the invoked shares for the benefit of holders of the SHAPL Debentures issued by Sadbhav Hybrid Annuity Projects Limited.

Shareholding Details

The filing provides a detailed breakdown of the acquirer's holding before and after the encumbrance. The total equity share capital of Sadbhav Engineering Limited stands at 17,15,70,800 shares, while the total diluted share capital is 18,15,70,800 shares.

Regulatory Context

The disclosure was made pursuant to Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Catalyst Trusteeship Limited clarified that it does not belong to the promoter or promoter group of the target company. The intimation regarding the encumbrance was received on July 17, 2026. The ISIN for the invoked shares is INE226H01026.