The Hindu Business Line : Duncans Ind gets Rs 31 cr for debt revamp

BANKS and financial institutions have released approximately Rs 31 crore for the rehabilitation of Duncans Industries Ltd, the flagship of the G.P. Goenka Group.

This is just about half the amount that the banks and the FIs have agreed to contribute towards the corporate debt restructuring (CDR) programme of the ailing Duncans Industries.

Confirming this development, Mr G.P. Goenka said that a total of Rs 62 crore has already been sanctioned by the consortium of banks and FIs but the total amount is yet to be released. "They would release it as and when we require. Till now, nearly half the amount has been released, and if we seek the balance tomorrow they would release it immediately," Mr Goenka told Business Line. This is a fresh debt issued by the banks and FIs to Duncans. As part of the CDR proposal, the promoters have already put in Rs 25 crore.

Fertiliser unit re-opened: The company has reopened its fertiliser plant, which is located at Panki in Uttar Pradesh, after a gap of three-and-a-half years. The plant was shut down on March 25, 2002, after the Kanpur Electricity Supply Corporation disconnected power supply to the unit.

"We have reopened the plant on August 30 and it is now running at full steam," Mr Goenka said. In June, this year, the management and workers had entered into an agreement, following which, on July 8, 2005, the lay-off was lifted.

The company would soon start finalising its accounts. It may be noted that the last audited annual report of Duncans Industries was published way back in 2001, when it prepared the same for an 18-month period ending September 30 of that year.

It has already prepared one set of accounts for the last three financial years, beginning from the 18-month period ending March 31, 2003, to the last financial year of 2004-05.

These are all unaudited results and it does not include the performance of its fertiliser plant. However, with the opening of the Panki plant, the results of this unit are likely to be incorporated in that accounts.

Legal dispute: Duncans Industries is still fighting a legal battle with the Union Government at the Supreme Court over the retention price mechanism for the fertiliser division, which was famous for its Chand Chhap brandname.

If it fails to win the case at the apex court then it would be liable to pay Rs 224.67 crore of which Rs 222.64 crore has already been recovered. Moreover, the Retention Price Scheme (RPS) accruals of Rs 140.30 crore made in the earlier years would also be adjusted.

According to the unaudited results prepared the company (excluding the Panki plant), the turnover of Duncans Industries for the 12-month period ending March 31, 2005, was Rs 118.35 crore against Rs 106.89 crore in the previous financial year, 2003-04. Over these two years, the net loss dropped to Rs 64.63 crore from Rs 82.96 crore during this year.

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