This milestone comes after months of negotiations with consortium lenders, marking a critical step towards stabilizing the company's financial health.

The jewellery company's troubles began in February 2023 when it came to light that it had defaulted on loans amounting to Rs 3,466 crore from various banks and financial institutions. In response, lenders, including PNB, initiated steps to recall loans extended to PC Jeweller.

In its latest disclosure to the stock exchanges on July 7, PC Jeweller confirmed PNB's acceptance of the OTS proposal through a communication dated July 6. The approved settlement terms comprise a combination of cash and equity components, along with the release of securities and mortgaged properties held by the banks.

This relief follows a similar agreement reached earlier with the State Bank of India (SBI), the country's largest lender, which accepted PC Jeweller's OTS proposal a few months ago. The cumulative approvals from major lenders are seen as a positive indication towards resolving the company's debt burden and restoring financial stability.

According to PC Jeweller's annual report for fiscal 2021-22, the company had borrowed from a consortium of 14 banks, including prominent names like SBI, Indian Bank, Union Bank, and Punjab National Bank. The total outstanding debt, as reported, amounted to Rs 3,278 crore, inclusive of interest and principal amounts.

The company's financial performance has reflected these challenges, with consolidated and standalone net sales for March 2024 plummeting by 72.03% and 72.01% year-on-year respectively. Despite these setbacks, recent optimism surrounding the OTS approvals has triggered some positivity, albeit cautious, among investors and stakeholders.

Looking ahead, PC Jeweller aims to leverage the approved settlements to chart a path towards recovery and sustained growth. The focus remains on restructuring its operations and enhancing liquidity while navigating the competitive landscape of the jewellery industry.

The largest lenders to PC Jeweller include SBI with outstanding dues of Rs 1,060 crore, Union Bank of India with Rs 530 crore, Punjab National Bank with Rs 478 crore, and Indian Bank with Rs 226 crore. These stakeholders play a crucial role in shaping the company's future as it strives to emerge stronger from its current financial challenges.