Financial Daily from THE HINDU group of publications
Thursday, Aug 14, 2003
Financial Daily from THE HINDU group of publications Thursday, Aug 14, 2003 |
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Corporate
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Restructuring Rayalaseema Alkalies to write down 50 pc equity C.R. Sukumar
Hyderabad , Aug. 13 FOLLOWING the corporate debt restructuring (CDR) scheme sanctioned by the CDR cell of Industrial Development Bank of India (IDBI) recently, the board of directors of Sree Rayalaseema Alkalies and Allied Chemicals Ltd (SRAACL), the Rs 288-crore chemicals major belonging to the TGV group, has decided to write down 50 per cent of the existing equity capital. While approving the CDR scheme, the financial institution has also advised the promoters of the company to infuse funds to the tune of Rs 20-crore into the company as equity over a period of two years. In a communiqué to shareholders, the SRAACL Chairman and Managing Director, Mr T.G. Venkatesh, said the company's proposal for debt restructuring under the CDR mechanism was considered favourably by the CDR empowered group. "The package approved consists of interest reduction on loans, reschedulement of term loan repayment, part term loans conversion into equity and funding of interest, etc. The interest rates on working capital is also envisaged for reduction," Mr Venkatesh said. In lieu of the write down of 50 per cent equity capital, the shareholders would be issued cumulative redeemable preference shares carrying 0.01 per cent coupon rate. These preference shares would be redeemed in four quarterly instalments commencing from April 1, 2018. Seeking the consent of shareholders for these proposals through postal ballot, he said the results of the ballot would be declared at the ensuing annual general meeting scheduled for September 9. In terms of the CDR package, 15 per cent of the outstanding on rupee term loan, foreign currency loan and non-convertible debentures as on April 2002 would be converted into equity shares of Rs 10 each.
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