Shaw Wallace & Co intends to appoint an Indian investment banker to act as a trustee between its creditors and itself, according to the repayment plan prepared by the company.
Company sources will start shortlisting the investment banking outfit once the Calcutta High Court approves of the repayment plan.
The trustee will be appointed to hold the proceeds of sales of the various wings of the liquor giant such as the consumer products division (up to Rs 20 crore), Shaw Wallace Gelatines (Rs 25 crore), Shaw Wallace & Hedges (up to Rs 20 crore), and the agrochemical division (up to Rs 20 crore) and pass it on to the creditors.
In addition, Rs 2.5 crore will be taken out of monthly profits besides money arising (up to Rs 20 crore) out of issue of shares through either a rights or a public issue will be held by the trustee and shall be utilised solely for paying off the creditors.
The repayment plan will become valid only after a high court order sanctions it. "All suits and proceedings including those now pending against the company by creditors shall remain stayed," once the order is passed.
According to the scheme, total monies to be paid is nearly Rs 200 crore, within a period of 27 months.
Creditors having claims up to Rs 10 lakh shall be paid within a period of 6 months from December 1, 1997. For creditors having claims exceeding Rs 10 lakh, the following has been decided:
l10 per cent of claims will be paid up on or before 9 months from December 1, 1997;
l15 per cent of the claims will be paid on or before 12 months from he stipulated date;
l15 per cent to be paid on or before 15, 18, 21, 24, 27 months.
Creditors are not entitled to any interest after June 30, 1996. After the approval of the plan by the high court, and after 27 months, the liabilities of the company through bill discounting and intercorporate deposits are expected to be less than Rs 100 crore. SWC will have a meeting with its creditors on March 16 to discuss the repayment plan.
The meeting has already been cleared by the Calcutta High Court.
