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Logistics and warehousing service provider Arshiya International today said it has initiated the financial restructuring process through the Corporate Debt Restructuring (CDR) route and has appointed SBI Capital Markets Ltd as its adviser. It is estimated to have nearly Rs 2,500 crore debt.
Its scrip has plunged nearly 62 per cent since January 9. Arshiya’s stock closed near 4-year low of Rs 46.45 on the BSE today as it remained locked in at lower circuit of 5 per cent for most part of the trading.
“After detailed discussions on the current financial affairs of the company, the Board decided to initiate a financial restructuring process under the CDR forum and has appointed SBI Capital Markets Ltd to advise the company,” Arshiya said in a filing to the BSE.
The company also said that it has decided to appoint “an independent professional firm to submit its report to the audit committee of the Board of Directors”.
Arshiya’s founder and managing director Ajay Mittal did not respond to calls made by PTI on the issue.
The notice on January 17 for a Board Meeting on Saturday had said, it will “consider and approve appointment of a reputed firm of Chartered Accountant to independently investigate into and submit a report to the Board on various allegations and reports about the company that appeared in the some sections of the media recently“.
According to the reports the trouble started for the company after it was denied a loan for expansion of activities at its Khurza Free Trade and Warehousing Zone (FTWZ). This led to the company investing some money on its own, which strained its cash flows.
On January 9, Arshiya International had said that it is rationalising its employee costs in the overall interest of the company.
Moreover, company’s promoters have also paid nearly Rs 125 crore against the convertible warrants issued to them previously.
The Mumbai—based company’s main assets include two free trade and warehousing zones (FTWZs)—— at Panvel, near Mumbai and Khurja in Uttar Pradesh—— and Arshiya Rail, through which it provides rakes and freight transportation.
In 2011—12, the company had reported consolidated net profit of Rs 120.78 crore and net sales of Rs 1,064.87 crore. Its net profit was Rs 70.05 crore during the first six months of the current fiscal, while the net sales were Rs 714.41 crore.
Arshiya is yet to report its financial performance for the October—December quarter.
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