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Pvt investors line up for Shree Rama Multi-Tech

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Poornima Mohandas Mumbai
Last Updated : Feb 06 2013 | 8:07 AM IST
A few private equity investors are believed to have evinced interest in picking up a stake in troubled laminates manufacturer Shree Rama Multi-Tech Ltd.
 
The Ahmedabad-based packaging company, which is undergoing a restructuring plan, aims to repay its dues to banks and financial institutions.
 
Banks and institutions have an exposure of around Rs 530 crore (which includes principal amount of Rs 375 crore) to Shree Rama Multi-Tech. The company's clients include Hindustan Lever, Emami and Vicco. Company officials refused to comment.
 
The Asset Reconstruction Company of India Ltd (Arcil) has a principal exposure of Rs 148 crore (having taken over debts from State Bank of India, ICICI Bank, SBICI), Industrial Development Bank of India Rs 76 crore, Exim Bank Rs 35 crore, IIBI, IDBI Bank, UTI Mutual Fund, Life Insurance Corporation and General Insurance Corporation among others.
 
"There are a lot of private equity investors interested in the company," said sources.
 
If private equity funds come in, they typically like to pick up a significant stake in the company, go in for a one-time settlement with lenders and take charge of the company's assets.
 
In case no foreign investors are roped in, the company may alternatively ask its lenders to convert a part of the debt into equity or embark on a preferential issue, sources said.
 
Arcil has acquired a sizeable portion of the company's debt from various lenders and it may convert a portion of the debt into equity. The company needs an immediate capital infusion of Rs 60 crore, of which Rs 15 crore will go towards capital expenditure and remaining towards repayment of lenders.
 
A meeting of all the lenders has been called on March 22 to approve the proposed scheme of restructuring. The debt recast proposal includes restructuring of loans, interest reduction and conversion of interest into funded term loans.
 
The company posted a net loss of Rs 65 crore for the 12 months ended December 31, 2004, and has carry forward losses of around Rs 190 crore. The share price of Shree Ram Multi-Tech has been peaking in recent days with the stock moving up from a low of Rs 4.60 to a 52-week high of Rs 17.90 on March 3, 2005.

 

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First Published: Mar 08 2005 | 12:00 AM IST

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