The promoter group of Southern Petrochemical Industries Corporation (Spic) is planning to infuse Rs 100 crore as part of its revival plan.
The company is planning to obtain approvals from the regulators for allotment of equity shares. It may be noted the Corporate Debt Restructuring Empowered Group (CDREG) for the company had earlier asked the promoter group to infuse Rs 150 crore, of which Rs 50 crore has already been infused.
A debt-equity swap of Arcil, the asset reconstruction company, and the proposed infusion of capital are the latest in a series of events that could lead to revival of the beleaguered fertiliser company, which closed its Tuticorin plant in 2007.
The A C Muthaiah-led Spic group, once South India’s prominent industrial house, with businesses spanning from fertilisers and chemicals to petrochemicals and logistics, went into trouble due to financial crunch. Spic owes its creditors around Rs 2,845 crore, to a consortium of banks led by Indian Bank. However, lenders such as IDBI Bank, ICICI and Bank of India have sold their Spic loans to Arcil.
A few months earlier, some properties of Spic were put on auction at the behest of Arcil and it is understood that the process is almost complete.
During the year under review, to augment the finances of the company, the promoter group of M A Chidambaram, at Arcil’s request, in line with the rework package approved by CDREG, infused Rs 50 crore as the first phase infusion through FICON Holdings Ltd (FICON), which increased the promoters’ stake to 40.2 per cent in February, said the company’s annual report.
The money was utilised towards settling part of the dues to Indian Oil Corporation, of Rs 370 crore. The said agreement with IOC led to resumption of supply of naphtha and furnace oil to the Tuticorin fertiliser unit, which had been shut since 2007.
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Then, as part of reviving the company, CDREG in March asked the promoters of Spic to infuse Rs 150 crore towards equity share capital, in two phases, inclusive of the sum of Rs 50 crore already infused.
Share allotment
As part of Phase-II infusion, of Rs 100 crore by the promoter group, the company is planning to issue/allotment of up to 43,478,260 equity shares of Rs 10 each, at an issue price of Rs 23 a share, inclusive of a premium of Rs 13 a share to FICON. The company is in the process of obtaining approvals, exemption/confirmation from the National Stock Exchange of India, the Securities and Exchange Board of India and the Reserve Bank of India for the issue.
Recently, Arcil asked the company for conversion of up to Rs 30 crore of outstanding debt into equity. Following which, Arcil was allotted 16,666,666 equity shares of Rs 10 each, fully paid, at an issue price of Rs 18 per share. In terms of the CDREG decision, the secured lenders are further entitled to conversion of debt of a sum of Rs 30 crore into equity/debentures, at their option.
After the allotment of equity shares, as mentioned, to FICON Holdings Ltd and Arcil in March this year, Spic’s issued, subscribed and paid-up equity share capital has increased to Rs 131.17 crore as on March 31, from Rs 107.95 crore previously.