The Hindu Business Line : Andhra Cements in talks for fresh one-time settlement

ANDHRA Cements Ltd (ACL), part of the Kolkata-based Duncan Goenka group, is currently negotiating with the financial institutions and banks for entering into a fresh one-time settlement (OTS) agreement.

This follows the shortfall in surplus generation as envisaged in the rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR)

Andhra Cements, with accumulated losses of over Rs 232 crore as on March 31, 2003, has a debt burden of over Rs 185 crore under secured loans segment and nearly Rs 49 crore as unsecured loans. On a paid-up equity of Rs 56.69 crore, its reserves amounted to Rs 157.25 crore, taking the total networth to Rs 213.95 crore.

According to the company sources, BIFR has directed a modification of the revamp scheme which provides for OTS of the dues to both the secured creditors and fixed deposit holders by sale of identified surplus assets.

"The company has since received approval to the settlement plan from all the banks and in principle approval from financial institutions. The company has concluded OTS with certain banks and FIs and is in the process of concluding the settlement with other banks and financial institutions within the current fiscal year," sources told Business Line.

Further, the sources said, BIFR has directed the operating agency to convene an Assets Sale Committee meeting to review the sale arrangements for the Vijayawada land before the board approved the sale. The Appellate Authority for Industrial and Financial Reconstruction had during April 2002 directed the company to sell the assets of the Vijayawada plant. The Andhra Pradesh Government has also exempted the company from the applicability of the provisions relating to the Urban Land Ceiling Regulation Act and granted permission to the company to sell the land for enabling repayment of the dues to public financial institutions and banks.

Following the BIFR orders, an OTS was made for certain debenture holders and fixed deposit holders who exercised the option to receive the principal amount by waiving the unpaid interest, sources said. In respect of pre-takeover dues of financial institutions and banks, the company is in the process of negotiating OTS, sources said.

According to them, debentures of face value of Rs 10.4 crore had fallen due for payment prior to 1994. These were rescheduled thereafter with the consent of the debenture holders and incorporated in the sanctioned scheme during 1994 read together with modifications issued by BIFR from time to time.

"However, these debentures so rescheduled could not be repaid as per the said sanctioned scheme. Financial institutions holding substantial debentures have agreed for an OTS. Consent has been accorded by the operating agency to the modified rehabilitation scheme based on the above and has been submitted to BIFR. The amount payable to other individual debenture holders are being settled/ redeemed on surrender of debentures by these debenture holders as per the directions of board and authority , pursuant to the order of the Andhra Pradesh High Court in appeal filed by certain small investors," sources said.