Pays off dues to all secured creditors

G. Gurumurthy

Coimbatore, Sept. 28 Salem-based Thambbi Modern Spinning Mills Ltd has come out of the Board for Industrial and Financial Reconstruction’s (BIFR) reference with the textile firm’s networth turning positive as on July 31, 2007.

The company, having its operations improved in the last three years, has paid off the dues to all its secured creditors.

Institutional creditors

Referred as a sick company since 2002, it has since then gone through successfully the one-time settlement of dues to its institutional creditors and banks namely IDBI, IFCI, ICICI Bank and State Bank of India.

Simultaneously, the company had also opted for product mixing to convert itself from being a commodity cotton yarn producing company into a high value-added speciality yarn production.

Its new product range includes milange yarns, lycra core yarns and flax linen yarns, the Managing Director, Mr R. Jagadeesan, said.

Revival of product manufacture and sales turnover apart, Thambbi Modern Spinning Mills had also gone for infusion of funds with proceeds from sale of personal assets from promoters and internal accruals. It has through a debt revamp settled Rs 17 crore to institutional lenders/banks, according to Mr R. Jagadeesan.

The company became sick with an accumulated loss of Rs 30.59 crore as on March 31, 2002, which eroded entirely its networth of Rs 16.95 crore (comprising Rs 4.9 crore of paid up share and Rs 12.05 crore free reserve) at the time of its reference to the BIFR.

As per the audited balance sheet of the company, its accumulated losses stood at Rs 42 crore as on July 31, 2007, whereas its networth too improved to Rs 57.39 crore (with Rs 5.76 crore paid up capital and free reserve of Rs 51.63 crore).

The company, with three yarn production plants having a cumulative spinning capacity of 30,000 spindles and a dyeing facility (for yarn and fibre processing), is a major cotton/blended yarn exporters.

It is in the process of discussion with few investment funds for further modernisation of works and capacity balancing at an outlay of Rs 20 crore.

(This article was published in the Business Line print edition dated September 29, 2007)
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