As part of a revamp plan, the Chennai-based debt-ridden Southern Petrochemical Industries Corporation Ltd (Spic) will raise $50.6 million (Rs 232.8 crore) by selling its majority stake in a subsidiary company in Jordan, to a joint venture partner.
The company made an announcement today to the National Stock Exchange in this regard.
In December, Business Standard had reported that Spic had initiated talks with its JV partner to sell its 52 per cent stake in Indo-Jordan Chemicals Company Ltd. The partner is Jordan Phosphate Mines Company Ltd.
The AC Muthaiah-led Spic group, once among South India’s most prominent ones, faces a financial crunch. It owes around Rs 2,845 crore to a consortium of banks led by Indian Bank. Some lenders, such as IDBI Bank, ICICI and Bank of India have sold their Spic loans to Arcil, the asset reconstruction company.
The company also failed to pay around Rs 370 crore due to Indian Oil Corporation (IOC), which was supplying naptha for Spic’s fertiliser plant at Tuticorin, then one of the biggest in the country, after which the unit was closed in 2007.
Things have started changing after the Union minister of fertiliser (who hails from Tamil Nadu) had said he would like Spic’s operations to resume at Tuticorin. The debt remains, but IOC said it would consider resumption in naptha sale. Last week, the secretary of the ministry of petroleum also said gas connectivity for the unit is being considered.
Since the chances of resuming operation started brightening, the promoters of Spic in February increased their stake in the company to 40.22 per cent. The promoter group has infused around Rs 50 crore, through Ficon Holdings Ltd. The earlier shareholding of the promoters was 31 per cent.