The Hindu Business Line : Som Distilleries at new high on debt-free move

THE loss-making Som Distilleries and Breweries is on a high over its attempts to become debt-free. The stock today touched a 52-week high at Rs 31.25 before closing at Rs 30.85 on the BSE with a gain of 3.52 per cent.

The stock has moved up 24.9 per cent in the past one week and 70.44 per cent in the last one month. The traded quantity in the counter on the BSE today was 2.58 lakh shares, up from the two-week daily average of 2.15 lakh shares.

Mr Jagdish Kumar Arora, Managing Director, told Business Line that the company has decided to settle all loan accounts.

It has already struck settlement deals with IDBI and Indian Renewable Energy Development Agency (IREDA).

Mr Arora said that through the deal with IDBI, a term loan of Rs 3.5 crore has been reduced to Rs 1.24 crore, which is being paid off in 12 equated instalments from August last.

The IREDA loan of Rs 8.41 crore has been brought down to Rs 3.24 crore and it is to be cleared within a year from October 2005 in monthly instalments.

"We are now negotiating with Bank of India and Bank of Baroda for retiring total borrowings of Rs 15 crore. The settlement may be expected within a couple of months. This would reduce our interest burden to a great extent and in the later part of 2006-07 would free our books of loans."

The promoters, who hold around 29.86 per cent of the Rs 10-crore equity of the company, are infusing fresh funds by way of loans, which could be converted into equities later, to pay off the borrowings, he added.

In 2004-05, Som Distilleries posted Rs 20.52 crore sales and clocked net loss of Rs 6.46 crore, while the interest cost was Rs 3.43 crore.

The company also plans to raise the paid-up capital by way of rights issue in the ratio of 1:1 and convert the warrants issued in May this year.

Mr Arora said that all these were expected to be completed by the end of the fiscal and take the paid-up equity up to Rs 31 crore.

He also said that the company has planned a winery venture with an investment of around Rs 10 crore, which would be operational by the beginning of next fiscal.

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