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Wednesday, Jun 11, 2003

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IFCI invites bids for Regent Agro takeover

C.R. Sukumar


IT is now official. Regent Agro Products Ltd (RAPL), the city-based ailing producer of virgin coconut oil, coconut water and desiccated coconut powder, is up for sale.

IFCI has invited offers for takeover, merger, amalgamation or lease of "a sick industrial company having facilities for processing of various coconut products", while not disclosing the identity of the company.

IFCI has stated that it has, as an operating agency, invited offers for this company pursuant to the directives of the Board for Industrial and Financial Reconstruction (BIFR).

According to IFCI, the sick industrial unit has facilities for the manufacture of coconut oil, coconut shell powder, coconut skimmed milk, commercial oil, and animal feed and curled coir ropes. The offers were invited both with and without one-time settlement (OTS) of dues of the financial institutions and banks.

The IFCI advertisement today has stated that the manufacturing unit was located at Gowripatnam village in West Godavari District of Andhra Pradesh with a paid-up equity capital of Rs 11.29 crore, which makes it clear that the offers were invited for RAPL. When contacted the Managing Director of RAPL, Mr N. Satyendra Prasad, confirmed that the advertisement indeed referred to his company.

The operating agency said it would evaluate the offers from interested parties while taking into consideration their proven financial, technical and management abilities, acceptability to BIFR, financial institutions and banks, willingness and ability of the bidders to bring in requisite funds, and the minimum possible relief and concessions from institutions and banks and the Central and State Governments.

Stating that the offers should reach it within 60 days at its Chennai office, IFCI said the received offers would be evaluated in consultation with BIFR.

Enquiries with the stock exchanges revealed that there was no communication from the company on its financial performance after December 2001.

For the year ended March 31, 2001, the company incurred a net loss of Rs 8.62 crore on a turnover of Rs 1.06 crore, taking the total accumulated losses to Rs 38.07 crore. As against this, its paid-up equity stood at Rs 11.29 crore and the reserves and surplus at Rs 20 lakh.

The company had a heavy debt burden of Rs 41.42 crore. Of this, the secured loans stood at Rs 38.22 crore, while the unsecured loans amounted to Rs 3.19 crore. Interestingly, of the secured loan component of Rs 38.22 crore, the interest accrued and dues alone stood at Rs 19.72 crore.

Following the directives of BIFR, Srikari Management Consults completed the techno-economic viability report. In its report to the board, Srikari recommended an OTS scheme for the company's dues. Subsequently, IFCI, the operating agency appointed by BIFR, discussed the issue with the financial institutions for roping in a strategic partner who could extend both financial and marketing support to the company.

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