Business Daily from THE HINDU group of publications
Monday, Jul 02, 2007
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Business Daily from THE HINDU group of publications Monday, Jul 02, 2007 ePaper |
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Corporate
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Sick Units SPIC losing Rs 70 lakh a day
The plant employs about 1,800 people and thousands more depend indirectly on SPIC.
M. Ramesh Chennai, July 1 Southern Petrochemical Industries Corporation (SPIC) is losing Rs 70 lakh a day in contribution as its fertiliser plant at Tuticorin remains closed for want of working capital, sources in the company said. SPIC has received into its account Rs 341 crore of subsidy dues from the Government, but the Debts Recovery Tribunal, Chennai, has ordered release of Rs 213 crore to banks towards past dues (devolved letters of credit) and only Rs 20.77 crore to SPIC. SPIC’s plant was closed towards the end of April and, according to company sources, would need Rs 50 crore only to restart the plant, leave alone working capital for operations. They told Business Line that Rs 20-odd crore would not be sufficient to reopen the plant. As the plant remains closed, thousands of jobs and agricultural production in Tamil Nadu are at peril. SPIC’s plant employs about 1,800 people and thousands more depend indirectly on SPIC. The company caters to half the requirement (of 1.75 lakh tonnes) of DAP, a key phosphatic fertiliser and, as reported in Business Line earlier, the State’s agricultural production is likely to be hit by the shortage. SPIC owes Rs 2,845 crore to a consortium of banks. In February, bank ers rejected an offer by SPIC to settle 52 per cent of the dues and a waiver of the rest. Many bankers, fearing questioning later, are considering the safer option of selling off their SPIC loans to asset reconstruction companies. IDBI has already done so. Banks then will get zero coupon bonds for the value of the loans. In their books the bad loans will get re-classified as ‘investments’. When the investments would be converted into cash, which would depend upon selling of the pledged assets, is another question.
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