The G P Geonka group hopes to complete the implementation of the restructuring package of Consolidated Fibres & Chemicals Ltd, recently approved by the financial institutions, by end-December 1998.
Implementation of the restructuring package, currently at an advanced stage of implementation, will enable the company to reduce the annual interest burden by almost Rs 10 crore per annum, announced the group chairman G P Goenka while addressing shareholders at the company's 10th annual general meeting held here yesterday.
Shareholders passed all the resolutions including that relating to conversion of part of the loan dues of the FIs into equity shares and issuance of equity shares to the financial institutions. Recently, financial institutions led by the Industrial Finance Corporation of India (IFCI) approved the restructuring package of the CFCL.
The company's financial restructuring proposal comprises waiver of penal interest, liquidated damages and all compound interest amounting to Rs 29 crore, reduction of the paid-up equity capital share capital by 50 per cent to Rs 31.21 crore, fresh infusion of fund by the promoter group in the form of equity share capital, conversion of a part of the loan into equity and reschedulement of the repayment of the balance loans.
Conversion of a part of the FIs dues into equity shares and the infusion of additional funds by the promoters is yet to be completed. Pending completion of the requisite legal and other formalities, the conversion into equity share capital of the loans and interest dues to the FIs has been shown as advance against share capital (pending allotment). Further, the issue of equity shares to the promoters will be made on receipt of funds in due course.
The reduction of the paid-up equity share capital of the company has been effected upon.
It now stands consolidated into one equity share of Rs 10 each for every two equity shares of Rs 5 each fully paid-up amounting to Rs 31.20 crore.
Meanwhile, the company has made a token profit of Rs five lakh in the first quarter of the current fiscal and has achieved a capacity utilisation of 118 per cent in the first four months of current financial year. "We hope to do better in the near future", added Goenka.
The acrylic fibre industry has petitioned the Government of India for imposition of anti-dumping duty on acrylic fibre imports from Japan, Portugal, Spain and Italy. The petition, it is understood, is in an advanced stage of consideration and once safeguard duty is levied on these countries, acrylic fibre prices in the domestic market is expected to move towards relative stability, the management feels.
