Financial Daily from THE HINDU group of publications
Wednesday, Feb 09, 2005
Financial Daily from THE HINDU group of publications Wednesday, Feb 09, 2005 |
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Corporate
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Sick Units Mangalam Cement revival plan gets BIFR nod Our Bureau
New Delhi , Feb. 8 THE Board for Industrial and Financial Reconstruction (BIFR) has given its nod for an Rs 213-crore revival package for Mangalam Cement Ltd (MCL). The cut-off date for the scheme is April 1. The scheme envisages a one-time settlement of dues to financial institutions. As per the scheme, the secured lenders are to be Rs 122.13 crore by September, settling on full and final basis their entire liabilities. The scheme envisages a capital expenditure of Rs 70 crore for a power plant. The additional working capital is estimated at Rs 21.09 crore based on working capital requirement of Rs 36.26 crore and current year's inventory levels. Further, the BIFR has also approved conversion of outstanding 14 per cent Optionally Convertible Cumulative Preference Shares into equity shares at par. As per the scheme, the Inter Corporate Deposit holders have been asked to agree to waive all interests on it. The BIFR Bench also directed that IDBI be designated the monitoring agency . MCL was asked to constitute a management committee to review, on a monthly basis, the operations in all aspects and monitor the implementation of the project and the rehabilitation scheme till such time the dues of the secured creditors are paid in full. MCL has also been instructed not to declare any dividends to its equity shareholders without the approval of the BIFR and IDBI during the period of rehabilitation. Banks and financial institutions have been allowed to retain the right to appoint their nominees on the company's board any time during the currency of the scheme. After information of the sanctioned scheme was received, the MCL stock firmed up 5.4 per cent to Rs 93.75 (11:06 a.m). On Friday the share had closed down 0.28 per cent at Rs 88.95. MCL was declared sick in May 2002 and IDBI was appointed the operating agency to formulate and submit a rehabilitation scheme under the Sick Industrial Companies (Special Provisions) Act. The latest hearing was called to consider objections or suggestions to the draft rehabilitation scheme (DRS). IDBI submitted that it had no objection to the DRS and that the net worth of the company would become positive immediately on implementation of the scheme. The accumulated losses would be wiped out in 2006-07. The accumulated losses as on September 30, 2000 completely eroded MCL's share capital of Rs 28.25 crore and reserves of Rs 47.09 crore, resulting in a negative net worth of Rs 21.86 crore. During the six months period ended March 31, 2004 the company recorded a turnover of Rs 127.44 crore and earned a gross profit of Rs 18.98 crore.
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