Fis Nod Isibars Plan To Revamp Debt Profile

The proposed debt restructuring package of Isibars has been approved by term-lenders ICICI and IDBI. The combined exposure of the institutions in the stainless steel long products company is around Rs 110 crore.

Sudhir Gupta, joint managing director, Isibars, said, "A financial restructuring had become inevitable as the present cashflow of the company was not able to support the entire interest outgo. ICICI had already approved it and now we have received a letter from IDBI approving the proposed financial recast package."

The company, however, is yet to receive approval from Exim Bank and GIC which have an exposure of Rs 30 crore and Rs 6 crore, respectively. The total debt of the company is around Rs 241 crore, of which Rs 234 crore is secured.

As per the recast, a part of the company's loans would be converted into equity and preference shares while the remaining loan component will be converted into zero coupon debentures repayable at a premium. The interest is proposed to be reduced to 10 per cent from 15-16 per cent.

"We have a strong component of foreign currency loans of around $ 8 million which has already been converted into rupee loans," Gupta said.

According to the proposed financial restructuring, the equity capital of Rs 24.27 crore would be reduced by 40 per cent and converted into non-cumulative preference shares redeemable in five equal yearly installments after 15 years.

The promoters will bring in fresh equity of Rs 6 crore and subscribe to 30 lakh equity shares of Rs 10 each at a premium of Rs 10 per share by March 31 2002. The promoters currently hold 53.7 per cent of the equity capital and post-restructuring, their stake would be reduced to 39.23 per cent of the restructured equity capital of Rs 27.59 crore.

The promoter's stake would however vary depending on the extent of conversion of loans by the lenders into equity.

Meanwhile, Isibars' plan to hive off its Rs 216 crore rolling mill at Khopoli in Maharsahtra into a joint venture company has not yet fructified. The company is still in talks with the Pune-based Kalyani Carpenter besides two other parties. "We have not been able to finalise our partner as valuation has been the prime reason," Gupta said.