Muthiah Ready To Sell Spc At Right Price

A C Muthiah, vice-chairman and president, Spic, is willing to get out of Spic Petrochemicals Ltd (SPC) if "the price is right."

The Indonesia-based $ 1.5 billion Polysindo group is a front-runner in the race to buy SPC because of the former's large presence in the petrochem field in south-East Asia.

More importantly, Spic has already signed an MoU with the company for marketing purified terepthalic acid (PTA) and polyester filament yarn (PFY) that SPC would be producing at its plant.

Polysindo, according to Muthiah, is keen on taking over SPC because they are among the largest producers of polyester fabric in the Asian region, and would like to get into the Indian market. Also, as Spic has already completed much of the spadework like putting up the utilities and completing the civil works at the project site, Polysindo will be able to reduce the start-up time considerably.

 

"SPC is a mess that we would like to get out of provided the price is right," Muthiah said in an informal meeting with newspersons here on Tuesday.

Any such move would, however, be dependent on the outcome of the legal battle currently on between Spic and MRL over Arochem.

Muthiah said that Spic would like to concentrate on its core businesses where the company has a good market share and where it enjoys an established presence. As part of its restructuring and consolidation exercise, Tuticorin Alkali Chemicals and Fertilisers Ltd. (Tac) will be merged with Spic.

The company is also finalising plans to spin-off two divisions, Spic-SMO which is into project consultancy and EPC contracts and the group's bio-tech venture, into separate entities.

Tac has two plants in Tuticorin and Tiruchirappalli, and makes soda ash and ammonium chloride. In the first six months ending March 1997, the company recorded a profit of Rs.311.22 lakh after tax compared to Rs.482.5 lakh for 18 months ending September '96.

A 60 per cent expansion in capacity is also underway.

In the case of Spic-SMO, the company is looking at a tie-up with Technipetrol, Italy for a joint venture where both partners will have an equal stake, Muthiah said.

During the current financial year, Spic will raise money from overseas markets to fund its various expansion programmes.

The company has planned a $ 50 million convertible bond issue for revamping its plants and adding new capacities at Tac.

The company will also be raising $ 60 million in floating rate notes (FRNs) for the thermal power project that a group company, Tamilnadu Petroproducts Ltd., is putting up at Tuticorin.

Spic has already signed a MoU with the company for marketing purified terephthalic acid and polyester filament yarn that Spic would be producing at its plant