The Union Bank of India has approved Indosolar’s proposal for one-time settlement (OTS), according to a Bombay Stock Exchange (BSE) filing. The debt of the Union Bank of India has been standing for over 9 years now.

The proposal has two components, serviceable debt and non-serviceable debt. The serviceable debt component will be paid within six years and the last installment will be due on or before March 31, 2014. The non-serviceable debt component will be converted into optionally convertible cumulative redeemable preference shares (OCCRPS) and redeemed within four years starting April 1, 2024.

According to Mercom India Research, Indosolar’s debt issues have been dragging on for few years now. In 2015, lenders to Indosolar including Union Bank of India gave the company a fresh lease of life through a second loan recast after it could not even service its debts.

“The company has been incurring losses as there’s less demand of Indian modules due to cost constraints, this one-time settlement will help the company turnaround its business. Out of the past few years, not one has been profitable for us as a company,” said a Indosolar executive.

According to annual returns and financial statements filed by Indosolar up to March 31, 2016, the total registered charges of Indosolar stands at ₹43,02,91,05,000.00 (20 charges) out of which, charges amounting ₹1,109.92 Cr (1 charge) are still open and ₹3,192.99 Cr (19 charges) are satisfied and closed. Overall, Union Bank of India held highest open charge, amounting ₹11,09,92,00,000.00.

According to financial statements filed by Indosolar up to March 31, 2017, the company’s current liabilities exceeded the current assets by ₹132838.84 lakhs.

According to Mercom’s Solar Manufacturing Tracker, Indosolar has installed solar cell manufacturing capacity of 260 MW.

Indian solar manufacturers have been struggling to compete with cheaper Chinese solar cell and module imports. In June this year, Indian solar manufacturers filed an anti-dumping petition with the Ministry of Trade and Commerce, against Chinese solar modules and cells. Domestic manufacturers are hoping for a reversal in their fortunes once the antidumping tariff is imposed.