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M. Ramesh

Chennai, July 16 From news emerging after the end of a lenders meet today, it appears that there is no immediate likelihood of any re-opening of the fertiliser plant of Southern Petrochemical Industries Corporation (SPIC), with bankers insisting on terms that the company says it cannot agree to.

Today’s lenders’ meet was held at the behest of the Ministry of Fertilisers and Chemicals. SPIC’s plant has been shut for over two months for want of working capital and consequent to the shortfall in fertilisers (DAP — di-ammonium phosphate), affecting the agricultural output in Tamil Nadu.

Sources told Business Line that the bankers today decided to open fresh Letters of Credit (LC), enabling SPIC to buy raw materials, subject to two conditions: SPIC will give an undertaking that it would honour the LCs and that the c ompany would ask for no reduction in its own offer of “52 per cent repayment of term loans” that it had made earlier, during the negotiations for a ‘one-time settlement’.

The lead bank, Indian Bank, is to formally write to SPIC setting forth these conditions. If SPIC agrees, then the lenders would release funds to the company from out of the fertiliser dues received in the company’s account.

However, sources in SPIC told Business Line today that the company could not agree to the condition that it would repay 52 per cent of term loan dues (Rs 2,845 crore). “The offer is not on the table anymore,” a source in the company said. The offer, made last year, was on the back of another agreement with other financiers, principally Deutsche Bank. Banks did not agree to the proposal then and the agreement has since lapsed, the official said. SPIC supplied half the DAP requirement of Tamil Nadu.

Related Stories:
SPIC losing Rs 70 lakh a day
Bankers reject SPIC's `improved proposal' for debt revamp

More Stories on : Sick Units | Petrochemicals | Fertilisers

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