Southern Petrochemicals Industries Corporation Ltd (Spic) has reported a net profit of Rs 81.98 crore during the year ended March 31, 2011, as compared to a loss of Rs 124.56 crore, a year ago.
The company has attributed this to the re-commencement of production of urea at the Tuticorin plant and other business operations, which continued throughout the fiscal. This has resulted in significant reduction in operating loss, according to a note accompanying the company's balance sheet.
It may be noted that the Tuticorin unit of the company was closed in 2007 after the company faced financial crunch and defaulted on payments of loans. SPIC owes 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.
In recent months, company’s promoters have been infusing money to resume operations.
“The company has commenced payment of dues as per the rework package and there has been delay in payment of some loan installments, which may entail additional outflow,” said the company.
The government also took a few measures for the fertilizers industry which, along with the above measures, enabled the company to operate the fertilizer plant, being its core business, at optimum levels resulting in profitable operations and reducing the accumulated losses.
As part of infusion of funds into the business, promoter group M A Chidambaram group, at the request of ARCIL and in line with the rework package approved by CDREG infused Rs 50 crore, as the first phase infusion, through FICON Holdings Limited, which increased the promoters stake to 40.22 per cent inFebruary last year.
