Business Daily from THE HINDU group of publications
Friday, Aug 10, 2007
ePaper
Business Daily from THE HINDU group of publications Friday, Aug 10, 2007 ePaper |
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Corporate
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Sick Units SPIC may resume operations next week
M. Ramesh Chennai, Aug. 9 Southern Petrochemical Industries Corporation (SPIC), whose fertiliser plant at Tuticorin has remained shut for want of working capital, is likely to resume operations from next week, sources say. This follows a decision of banks to open fresh Letters of Credit, enabling the company to buy naphtha, the feedstock for DAP production. A couple of months ago, a sum of Rs 341 crore was received into SPIC’s account with Indian Bank, the lead bank of the lenders consortium, from Government, towards subsidy dues. Earlier, the banks said they would divide the funds among themselves and set it off against past dues. In July, the banks said they would open fresh LCs for SPIC only on two conditions: that SPIC would give an undertaking that it would honour the LCs and that it would not reduce its offer of settling 52 per cent of the term loan dues (of Rs 2,845 crore). The offer was made by SPIC last year, but was rejected by banks which felt it was unacceptably low. SPIC had then told Business Line that the offer of ‘52 per cent settlement’ was “no longer on the table”. Now, it is learnt that banks have opened the LCs for SPIC. As regards repayment of term loans, SPIC and the lenders will start a fresh round of negotiations. Since LCs have opened, SPIC will get naphtha next week—its first supply since the plant’s shut down in April.
Related Stories: SPIC-banks deadlock continues SPIC losing Rs 70 lakh a day Bankers reject SPIC's `improved proposal' for debt revamp More Stories on : Sick Units | Fertilisers
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