Ashima completes debt rejig

Ashima Dyecot Ltd, promoted by Ashima Ltd, which houses the group's processing facilities has completed the restructuring of its debts with its secured leaders. Ashima Dyecot is a closely-held unlisted company, according to a media release.

Interestingly, Ashima Ltd, a flagship company of the group, is yet to embark on debt restructuring exercise. "We would like to deal with the matter only when its due," said Nitin Parekh, executive director of Ashima, when asked about Ashima Ltd.

Parekh said the High Court of Gujarat has passed a scheme under Section 391, Company's Act 1956, with a near 100 per cent voting in favour, putting a closure to the 14-month exercise. He said this would help the group meet the reduced debt servicing liabilities.

Some of the scheme's features are: no interest would be accrued or paid after December 31, 2004. The accumulated interest, penal interest etc till then would be reduced by about Rs 21.60 crore, which is a reduction by 80 per cent.

The balance amount of accumulated interest would be paid over a period of next 5 years without any interest. Taking the present value of the two payments, total debts stand reduced from Rs 278.35 crore as of December 31, 2004, to about Rs 127.52 crore, ie a reduction of about 55 per cent, said Parekh.

The promoters are likely to bring in new equity to the extent of Rs 13 crore at a premium of Rs 10 per share. Equity allotment is being done to the institutions by way of conversion of a portion of their debt to the tune of Rs 23.81 crore at a premium of Rs 10 per share.

Parekh, said with the absence of a recompense clause, the company would be able to utilise its resources for its expansion plans in the future as per the laid down scheme.

The company has started working as per the scheme and the first installments have already been paid, he said.