B K Birla Group flagship Kesoram
Industries Ltd is focusing on a sustainable turnaround and expecting to conclude its second phase of restructuring process by inducting a strategic investor into it and finalising a debt resolution plan with bankers by the next month, a company official said on Wednesday.
The first phase of restructuring was the demerger of its tyre business from the company and taking it into a new entity, Birla Tyres Ltd, he said.
"We hope to conclude the ongoing restructuring by December. This involves induction of a strategic investor who will infuse funds to create ample liquidity for ramping up operations and clearing of the current dues of the lenders," Kesoram wholetime director and CFO P Radhakrishnan told PTI.
Sources said the strategic investor is expected to infuse fund through a structured debt or may pick up a minority stake.
"The company is likely to rope in US-based fund Farallon Capital to retire its debt to the Indian lenders with whom a settlement scheme is currently being worked out," they said.
After hiving off the tyre division, Kesoram is now mainly a cement company and has a total outstanding loan of Rs 2,038 crore, including Rs 1,500 crore of long-term debt, Radhakrishnan said.
"The overall debt on the company books will not change after the restructuring but we will be in a comfortable position to manage it. This will help ramp up manufacturing operations and improve cash flow," Radhakrishnan said.
The company is now operating at about 50 per cent capacity.
The fresh capital infusion by the strategic partner will help manage the Rs 200 crore working capital shortfall for the company to ramp up its manufacturing capacity, the official said.
The Manjushree Khaitan-led company was back in the black in the second quarter of this COVID-hit fiscal.
The firm had posted a net profit of Rs 31.5 crore from a loss of Rs 31.3 crore in the same period last year.
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