The Hindu Business Line : FIs, banks okay debt recast plan for Willard

THE process of bifurcating the sugar and jute business of the ailing Willard India Ltd has got a fillip with the banks and financial institutions approving its debt restructuring package.

Representatives of leading banks and financial institutions finalised the package of the company at a meeting of the Corporate Debt Restructuring (CDR) Cell in Mumbai recently.

A senior official of Willard India said CDR Cell had offered a two-year moratorium. Repayment of the principal loan amount would begin from September 2006 and would be spread over five years in equal instalments.

A part of the interest on loans has been converted into interest-free loan. The rest of the interest has been reduced to 10.25 per cent from 14-18 per cent earlier.The CDR Cell has allowed the company to repay the interest amount between 2011 and 2013, that is, after the completion of the repayment of the principal amount. All these loans were taken by the company for its sugar business only.

Willard India had also taken loans from the Sugar Development Fund.

The official said with the debt restructuring already in place, the company would now go ahead with its proposal of bifurcating the organisation between its two main businesses, sugar and jute.

Willard India is the flagship company of the Delhi-based K.K. Bajoria. At present, it has a jute mill called Chitavalsah in Andhra Pradesh and a sugar unit at Bulandsahar in Uttar Pradesh.

While the capacity of the jute mill is 95 tonnes per day that of the sugar unit is 3,500 tonnes crushed per day. EarliWillard India had a battery manufacturing facility too.

Willard India is contemplating to de-merge the two businesses into two wholly owned companies. It would be done either through a sale or transfer of the respective businesses, along with its assets and liabilities.

The company had already appointed two consultants, Deloitte Touche Tohmatsu and the Kolkata-based legal firm Khaitan & Co, for this job. The official said representatives of Khaitan & Co are supposed to submit their report on the bifurcation shortly.

For the year ended March 31, 2004, Willard India's net sales were Rs 106.17 crore against Rs 129.58 crore in the previous financial year. Net loss of the company dropped to Rs 3.96 crore from Rs 4.15 crore.

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