 "SBI, BoB, IDBI and ICICI to take 53.63% stake in CCCL")
The company had recently put forward the proposal to its shareholders in its Annual General Meeting. In its notice to the shareholders, the company explained that as part of restructuring package for the company, the lenders have conversion option at anytime during the restructured period. This is approved by Corporate Debt Restructuring (CDR) empowered Group in March and April 2014 and as per the approved CDR scheme, with respect of Working Capital Term Loan (WCTL) and Funded Interest Term Loan (FITL),
According to the annual report, the lenders are exercising their option to convert the amount of WCTL and FIL into equity shares for an amount not exceeding Rs 82,50,13,096 into fully paid up equity shares of the fave value Rs 2 each, subject to requisite CDR/ statutory approvals, towards payment of part of their dues at a price of Rs 3.86 a share.
The company officials were not available for a comment.
The proposed issue of equity shares will be on preferential basis to the secured lenders.
Post allotment the four Banks together will have 53.63 per cent shareholding in the company, including SBI (26.53 %), Bank of Baroda (11.61 %), IDBI Bank Ltd (4.83 %) and ICICI Bank Ltd (10.66 %). Total equity shares to be allotted to these Banks would be 21,37,33,963. These allottees do not hold any shares of the company prior to the issue.
The object of the issue of the equity shares is reduction of the company's debt to the secured lenders, who have the option to convert a portion of their debt into equity. The lock-in requirement will be applicable to all the allottees, said the company document.
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During 2014-15 the company has reported a loss of Rs 154.23 crore as compared to loss of Rs 223.69 crore in 2013-14. Revenue dropped to Rs 678.53 crore from Rs 884.61 crore.
The losses are attributed to high input costs, irreguar supply of raw materials, high finance costs and unfavourable market conditions.
The company inspite of its efforts could not infuse funds as per the CDR requirements before April 1, 2015. CCCL could only infuse Rs 55 crore out of the sale of the company's Porur property. The rest of the amount is being converted into equity and has been allotted to the CDR lenders.
As per the CDR package, the company should infuse funds to the tune of Rs 220 crore towards margins, reduction of debt and shoring up of working capital by March 31, 2015.
Following that the lenders have decided to convert the balance of loan dues, as per CDR, on April 1, 2015 into equity of the company.
CCCL began the 2014-15 with an order book of Rs 433.15 crore, but with economic slowdown and lower order booking coupled with slower project execution the asset base and the fixed cost structure which was built up affected the company's profitability. Delayed project execution has affected payment from clients and the company's cash flows.
The company said the year has seen enhanced working capital requirements, due to clients delaying payments. Amounts due from clients have shot upto Rs 1,070.18 crore, including retention of Rs 168.95 crore. Dues from clients for completed major projects to the tune of Rs 102.57 crore has added to liquidity.
To address the challenge has company has set up a strategic senior management team to recover dues and claims outstanding, over the past 12 months CCCL has implemented cost optimisation including cutting overheads and rationalisation of human resources. These internal cost cutting has brought down the overheard cost to the tune of Rs 38.29 crore.