Ess Dee Aluminium surges on revival hopes

Ess Dee Aluminium was locked at 5% upper circuit at Rs 44.35 at 10:40 IST on BSE after the company said SSG Capital has agreed to participate in the revival of the company.

The announcement was made after market hours yesterday, 6 December 2016.

Meanwhile, the S&P BSE Sensex was up 27.02 points or 0.1% at 26,419.78.

On the BSE, 5,403 shares were traded on the counter so far as against the average daily volumes of 17,199 shares in the past one quarter. The stock had opened with an upward gap of 5% and remained locked at that level at Rs 44.35 so far during the day.

The stock had hit a 52-week high of Rs 311 on 7 December 2015 and a record low of Rs 39.05 on 24 November 2016. It had underperformed the market over the past one month till 6 December 2016, sliding 19.29% compared with the Sensex's 3.23% fall. The scrip had also underperformed the market in the past one quarter, declining 23.74% as against the Sensex's 8.92% fall.

The small-cap company has equity capital of Rs 32.05 crore. Face value per share is Rs 10.

Ess Dee Aluminium is suffering from severe financial stress due to liquidity constraints which in turn have resulted in to the company's manufacturing plant being virtually non-operational with negligible production. The company has been looking at various options for revival and has been in active discussion with existing and prospective lenders.

In this context, he funds managed/advised by SSG Capital Management and their associates (the prospective investor) have agreed to participate in the revival of the company. The agreement is subject to the consent from the company's bankers/lenders to facilitate a re-working of company's capital structure to long term sustainable levels. The company is hopeful of recommencing the production early in the new calendar year.

Ess Dee Aluminum reported net loss of Rs 58.76 crore in Q1 June 2016, higher than net loss of Rs 13.11 crore in Q1 June 2015. Net sales declined 99.8% to Rs 0.25 crore in Q1 June 2016 over Q1 June 2015.

Ess Dee Aluminum manufactures aluminium foils for packaging purpose.

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