The consortium of banks funding Manu Chhabria liquor major Shaw Wallace and Co (SWC) are seeking to know how the company's repayment plan for creditors would be financed and how the company has fared in 1997-98, before deciding on a crucial review of the existing credit limits for the company.
SWC, on the other hand, is expected to clock a healthy group operating profit of about Rs 100 crore for 1997-98.
According to the chairman of a public sector bank which has a fair amount of exposure in SWC, the banks are seeking to know the financing details of the plan before embarking on the review.
This is because the financing pattern would throw light on the strength of the liquor major, the banking sources said. The existing limit for the company is Rs 40 crore.
"It is not as if we have already decided to revise the limit upward. That is not the case. Any decision to review the existing limit would hinge on how SWC will fund the repayment plan and how it has fared in 1997-98. We'd like to know these things", the bank chairman told Business Standard.
According to an SWC spokesperson. the method of funding the repayment has already been laid down before the courts.
Besides, the revival plan drawn up by the company also mentions a number of financing details, the spokesperson said.
Sources also indicate that while the detailed results for 1997-98 are being readied, the SWC group as a whole is expected to net substantial operating profits, in the region of Rs 100 crore, up from about Rs 85 crore the last fiscal. This, sources said, indicated that the core businesses of the liquor major are in sound health, a fact even the banks do not dispute and see as a key strength of the company.
"The key business of the company is in good health, unlike the other Chhabria company, Dunlop, which is closed and in losses", a banker explained.
However, SWC appears to be concerned about the row which has now broken out over the sale of the CPD to Henkel Spic India , with a minority shareholder of Calcutta Chemical Company, Krishna Das Paul, attempting to better the Henkel offer. SWC sources feared a delay in the entire plan given the present situation. Paul has submitted his offer before the Company Law Board (CLB) and the next date for hearing is only in end-September.
