The Securities and Exchange Board of India (Sebi) has asked the Ahmedabad-based Arvind Mills to furnish more disclosures in its prospectus, which has been filed with the regulator seeking approval for a Rs 75 crore rights issue.
Among the 60-odd observations made by the securities watchdog, the Arvind N Lalbhai-promoted company has been asked about the 'sacrifices' which the banks and financial institutions would have to make in reducing its debt burden and the restructuring which is underway at the company.
The banks and institutions are expected to sacrifice close to Rs 1,000 crore as part of the restructuring. The rights issue, is also part of the revamp scheme.
While the restructuring will reduce the company's Rs 2,200 crore debt by nearly half, it will still have to pay up Rs 1,300 crore.
The Sebi has also sought details of its future prospects, including cash flows and plans to sustain its earnings in the future.
Or whether the company will be able to meet its obligations in the long term in case the lenders opt for a longer repayment period.
While, as per Sebi regulations, companies are not supposed to make future earnings forecasts, it remains to be seen whether some of the details being sought will find a mention in the final offer document.
According to sources, Sebi's objective is aimed at a thorough due diligence. "The issue will not be approved until the disclosures are up to the Sebi's satisfaction," sources said, adding that the prospectus will contain relevant details necessary for investors to make an informed decision.
