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| While the Kurnool unit with a capacity of 5 lakh tonne per annum will resume operations next week, the main unit in Nalgonda district with a capacity of 9 lakh tonne per annum will go on stream a fortnight after that, said a senior official of the company.
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| As per the scheme of arrangement finalised by the board, which also considered the valuation report submitted by Ernst & Young, all the assets and liabilities of the company related to cement business, including employees, will be automatically transferred to a subsidiary company called Rain Industries Ltd.
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| While Ernst & Young has valued the cement business of company for Rs 238 crore, the net value of the company is estimated at Rs 75 crore, after taking out Rs 163 crore debt liability.
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| Rain Industries will issue shares to Priyadarshini Cement Limited for Rs 75 crore, at a premium of Rs 42 per share with a face value of Rs 10 each. With this, Priyadarshini Cement will become a holding company for Rain Industries Ltd.
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| The scheme has been worked out to avoid the reference of Priyadarshini Cement Limited to the Board for Industrial and Financial Reconstruction (BIFR).
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| In its present form, Priya Cements will have to be referred to BIFR with the wiping out of total networth due to accumulated losses.
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| Priya Cements, in which cement major Gujarat Ambuja owns a little over 5 per cent stake, suffered a loss of Rs 51 crore for the 12-months period ended March 31, 2003 and posted a further loss of Rs 2 crore for the quarter ended June 30, 2003, even after having an extraordinary other income of Rs 9.60 crore from the sale of its shares in Andhra Pradesh Gas Power Corporation Limited. Priya proposes to sell the remaining shares it holds in AP Gas in due course of time.
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| With the revised structure, the company hopes to achieve a quick turnaround as cement prices improved significantly in the recent past.
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| As per the CDR package, the promoters have to infuse Rs 7 crore into the company, besides mobilising Rs 24 crore loans, to meet the funding requirements. |
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