Gayatri Sugars in financial recast

The proposed allotment was approved at today's extraordinary general body meeting (EGM) of the company and will also see the IDBI and the IFCI convert part of their debt exposure into equity.

The proposed allotment to promoters and their associates would be by way of conversion of Rs 3.52 crore in unsecured loans and preference share application money of Rs 4.72 crore already brought in by them.

It may be noted that while sanctioning working capital and term loans to the company earlier, Andhra Bank had stipulated that the unsecured loans from the promoters and preference share application brought in by them be converted into equity capital.

The promoters brought in the unsecured loans and preference share application money as part of the cogeneration and expansion projects totaling Rs 8.24 crore.

The EGM also approved the allotment of 66.8 lakh shares to IDBI by conversion of 20 per cent of their loan and overdue interest, and 30.68 lakh shares to IFCI by conversion of 20 per cent of their loan and overdue interest.

This is part of the restructuring script approved by the Corporate Debt Restructuring Cell, Mumbai, in August 2003. IDBI and IFCI have converted 20 per cent of their term loans totaling Rs 7.58 crore and overdue compound interest and liquidated damages of Rs 2.16 crore into equity.

The EGM also passed a special resolution to issue 95.36 lakh cumulative redeemable preference shares (CRPS) at six per cent interest to financial institutions, by converting the existing CRPS at 13 per cent interest along with the accumulated dividend/interest on them.

The IDBI will get 70.84 lakh preference shares and the IFCI will get 24.52 lakh preference shares in the conversion.

The CRPS can be redeemed on April 1, 2017 after repayment of the term loans to the IDBI and the IFCI. The preference shares can be converted into equity shares at the option of the institutions.

After the proposed allotment, the company's equity would increase to 4.29 crore from the existing 2.5 crore. The promoters stake in the enhanced equity will come down to 62.79 per cent from the present level of 75 per cent.

The stake of the IDBI and the IFCI, which held 7.98 per cent stake each before the issue, will go up to 20.18 per cent and 11.78 per cent respectively.

Banks and the UTI will have their stake pruned down to 4.41 per cent from 7.58 per cent. Public holding will come down to 0.84 per cent from 1.45 per cent.