Banks and financial institutions (FIs) are planning to reschedule interest payments due from SVC Superchem, which has recently set up a 1.2-lakh tonne per annum purified terephathalic acid (PTA) in Chhata, Mathura. The move is aimed at preventing the account from turning sticky.
Payments on account of interest accumulated up to October will be deferred by one year, and will now begin only in October next year. The company has not paid interest to its lenders to the tune of Rs 25-30 crore. This amount will be funded by the banks and institutions in the form of a working capital loan extended to the company.
Around seven banks and leading financial institutions have an exposure to this company, the lead consortium of them being the Industrial Finance Corporation of India (IFCI).
There have been no concessions given on the interest rate on loans, which is around 14-15 per cent, as the company is not making cash losses as yet, said sources.
The account will also not be shown as a non-performing asset (NPA) in the books of lenders, since as per the Reserve Bank of India guidelines, banks can re-phase loans to companies that have not yet started commercial production and run into time and cost overruns, on a merit basis, without classifying them as NPAs.
IFCI has projected sales of Rs 263 crore for the year ended March 31, 1999, and rescheduling has been done on this basis, sources said. The company has taken term loans to the extent of Rs 175 crore. Borrowings on account of working capital requirements have been 80 crore.
SVC Superchem has also raised Rs 72 crore through a private placement of debentures and has taken a foreign currency loan of around Rs 9 crore. Promoters' contribution amounts to Rs 84 crore.
The company is promoted by Suresh Chaturvedi of the Chaturvedis group, which is basically into undertaking engineering projects on a turnkey basis.
The company's PTA project had faced time and cost overruns, resulting in a revision of the project cost. The original cost envisaged by IFCI was Rs 365 crore but this was revised to Rs 633 crore, the excess amount put in by the banks and institutions. Trial production began in April this year and commercial production in August.
The domestic market for PTA, an important feedstock for the polyester industry, has been facing a downturn in the light of the south-east Asian crisis, which has resulted in large scale dumping from countries like Korea and Indonesia.
