EID Parry in talks to restructure Rs 200 cr debt

EID Parry has initiated dialogue with banks to restructure loan to the tune of around Rs 200 crore, which the company has taken for its refinery project in Andhra Pradesh. The company stated that commissioning of the project is delayed for around 8-9 months due to the non-availability of the gas and it will take another 18 months to commission the project.

The Silk Road Refinery is a JV between Murugappa Group’s EID Parry and global company Cargill. The refinery is coming at Kakinada with a capacity of 600,000 tonnes and can be expanded to 1 million tonnes.

Meanwhile, the company has now decided to install a coal boiler instead of gas. The project will attract an investment of around Rs 100 crore which is over and above Rs 450 crore, which the company invested in the project.

EID Parry’s Managing Director Ravindra Singhvi said, “Since we were not getting the gas, we stopped at refinery and we had applied to the government for allowing us to putting up a coal boiler and it was approved. We are now contemplating to put up the coal boiler which should complete that about 1-1.5 years. The refinery operations are likely to resume somewhere in 2013.”

The capex maybe around Rs 80-Rs 00 crore, spread over for around two years, and the company has enough plans for the funding the Capex, he said. It may be noted, the company already spent around Rs 450 crore in the project so far.

P Gopalakrishnan, vice president — finance, EID Parry added that the company has approached the Banks to restructure loan around Rs 200 crore and defer the payment it till the project commence operations.

Speaking to analysts recently on the loss the company would be incurring on an annual basis, Singhvi said “we all have the skeleton staff now, so the fixed cost will not be much and we are already going for the restructuring with the banks, the cost will not be very significant in this period.”