Tilaknagar Industries gains on debt restructuring; settles ₹44.13 crore loan

Suresh P Iyengar Mumbai | Updated on January 27, 2020

To issue 1.98 lakh equity shares to Edelweiss Asset Reconstruction at ₹17.05/share

The shares of Tilaknagar Industries, a maker of Indian-made foreign liquor (IMFL), gained 5 per cent to touch ₹17 on Monday as the company settled an outstanding loan of ₹44.13 crore with IDBI Bank for ₹16.04 crore.

In a statement issued to exchanges, the company said it has settled the dues of IDBI Bank under the IDBI Rinn Mukti Yojna 2019-20 Scheme and opted for a one-time settlement (OTS) of the company's account classified as NPA.

According to the OTS, the company has settled the dues to the bank by paying ₹16.04 crore against the total dues of ₹44.13 crore payable to the bank, it said.

On the BSE, 14,006 shares were traded on the counter. The stock hit a high of ₹16.97 and a low of ₹16.6. It hit a 52-week high of ₹20.18 on November 28, and a 52-week low of ₹11.6 on July 8.

Last Thursday, the board approved a proposal to increase the share capital of the company to ₹210 crore from ₹150 crore and allot shares to lenders to convert part of its outstanding loan into equity.

As part of the debt restructuring, the company will issue about 1.98 lakh equity shares to Edelweiss Asset Reconstruction Company at ₹17.05 a share to convert debt of ₹33.87 crore into equity. As per the proposed debt restructuring, Edelweiss ARC will convert its debt exposure to the company from ₹523 crore to ₹344 crore.

9% interest, 4-year spread

The restructured debt will carry an interest rate of 9 per cent a year and is payable over four years till March 31, 2024. The balance Edelweiss ARC debt of ₹144.98 crore will be written off if Tilaknagar Industries meets its obligations on debt restructuring.

The company will also issue about 5.36 crore equity shares to investors at ₹13.75 a share on a preferential basis through a private placement.

Post restructuring, the promoters’ holding will come down to 34.52 per cent from 54.8 per cent, Edelweiss ARC will hold 10 per cent, new individual public investors will own 27.1 per cent and public holding will come down to 28.38 per cent from 45.05 per cent.

As on January 7, the company’s overall debt to banks and financial institutions was at ₹1,309 crore. It has already defaulted on loans taken from SBI, Bank of India and IDBI Bank.

Established by Mahadev L Dahanukar in 1933 as Maharashtra Sugar Mills, it was renamed Tilaknagar in honour of Dahanukar’s friend and freedom fighter Bal Gangadhar Tilak.

In 1987, when legislation was introduced compelling all sugar production to be managed by co-operative schemes, Maharashtra was forced to suspend its sugar business. Tilaknagar Distilleries & Industries was subsequently formed as a subsidiary, and the company expanded into industrial alcohol and IMFL.

Published on January 27, 2020

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