Opto Circuits to restructure $65 mn worth debt

Will be moved to its overseas subsidiaries

Opto Circuits (India) Ltd (OCI), the Bangalore-based manufacturer of invasive and non-invasive medical equipment, is set to restructure its debt portfolio. It aims to reallocate debt worth $65 million (about Rs 356 crore) among its overseas subsidiaries.

The gross debt of OCI as on December 31, 2012, is Rs 1,065 crore and is leveraged 0.48 times. Of this, around 30 per cent is long-term debt (acquisition finance) in Dollar terms and the rest is in various denominations — Indian Rupee, Euro and US Dollars. The company has cash and bank balances worth Rs 91 crore and the net debt is calculated at Rs 974 crore.

“Majority of our business is outside India and we need working capital for all our subsidiaries in Germany, the US, Malaysia and Singapore. We are in the process of restructuring our debt which is of the order of Rs 1,065 crore borrowed in Rupee denomination in India. We will restructure a part of it amounting to $65 million in such a way that each of our subsidiaries will share the burden on a standalone basis,” Vinod Ramnani, chairman and managing director, Opto Circuits, told Business Standard.

The idea of restructuring the debt is to see that OCI’s burden is reduced and distributed among the subsidiaries. Each subsidiary will henceforth have some debt burden, he said.

Opto has two main subsidiary companies — Opto Cardiac Care Ltd (OCCL) and Opto Eurocor Healthcare Ltd (OEHL). Each of these subsidiaries has step-down subsidiaries under their fold in Malaysia, Singapore, Germany and the US. The funds raised will be used for these two main subsidiaries, Ramnani said.

However, the company is still working out the exact requirements of working capital for each of its subsidiaries. “We are presently working out the details for each subsidiary on a standalone basis and we will complete the process very soon,” he said.

For the third quarter-ended December 2012, Opto Circuits reported consolidated sales of Rs 619 crore, a year-on-year growth of 1.3 per cent. Of this, OCI accounted for Rs 188 crore, OCCL contributed Rs 257 crore and Rs 124 crore by OEHL. Another subsidiary, AMDL contributed Rs 10 crore, while the remaining Rs 40 crore came from other subsidiaries.