TPL to raise Rs 52 cr by mortgaging assets

The Tamil Nadu Petroproducts Ltd (TPL) is planning to raise Rs 52.50 crore as additional working capital by mortgaging or charging all its immovable and movable properties, both existing and future, to three banks -- IDBI Bank, Axis Bank and the IndusInd Bank.

The company, which is into manufacturing and marketing of petrochemicals and chemical intermediates, on Friday received approval from its shareholders for the proposal at its AGM.

According to its annual report, IDBI sanctioned Rs 25 crore, Axis Bank Ltd Rs 20 crore and IndusInd Bank Rs 7.5 crore as additional working capital facilities for the company.

The resolution passed on Friday would enable the company to raise the amount together with interest at already agreed conditions. However, the company officials refused to elaborate on the mortgaging.

“One of the conditions stipulated for availing the said financial assitance is to secure the loan by a mortgage/charge on all the immovable and movable properties of the company both present and future ranking pari passu with the charges created and/or to be created in favour of the existing charge holders, subject to the exclusive mortgage of a specified property by way of deposit of title deeds to Housing Development Finance Corporation Ltd,” said the explanatory statement by the company to the share holders.

The debt equity ratio of the company stood at 0.21 per cent as on March 31, 2011. It has secured additional working capital limits to Rs 45 crore during 2010-11.

It has made a profit of around Rs 21.22 crore from selling its 14.90 per cent equity share capital in Henkel India Ltd to Mumbai-based Jyothi Laboratories Ltd. The income from the disinvestment was around Rs 60 crore. Through the disinvestment, the company was able to infuse funds into its operations and these funds were parked in working capital limits.

TPL is also expected to transfer equipment and drawings of its normal paraffin manufacturing project worth Rs 21.23 crore to its proposed overseas project at Singapore, soon. It has stopped expansion of normal paraffin capacity in India during the year 2004, due to change in market conditions.