The shareholders of SPIC, the fertiliser manufacturer, have approved a proposal to enable promoters bring in funds as part of a debt restructure package.
At the company’s annual general meeting today, the shareholders approved resolutions providing for promoters to infuse over Rs 65 crore through issue of convertible warrants in two tranches amounting to over 25 per cent of the current voting rights.
AMI Holding Pvt Ltd, a promoter group company, will subscribe to the warrants. In the first tranche, 1.49 crore warrants (one warrant to be converted to one equity share) at Rs 17.50 each, representing about 10 per cent of the voting rights upon conversion, will be issued to bring in Rs 26 crore.
In the second tranche, 2.23 crore warrants will be issued to raise Rs 39 crore.
The proceeds will go to pay the creditors under a court-approved scheme.
The debt restructure approved by the High Court of Madras on August 12, 2012, covers liabilities of over Rs 1,367 crore.
The exact amount payable depends on any one of three options the debtors choose under the scheme: they get 60 per cent of their dues in 46 quarterly instalments over 11 years; or 22 per cent in 12 instalments over three years; or 18.5 per cent as a one-time payment.
Addressing shareholders, the SPIC Chairman, Ashwin C. Muthiah, said the company had debts amounting to over Rs 3,300 crore at the peak of its woes. But he, as the Vice-Chairman earlier, and Chairman now, along with the promoter group and team had worked to bring the liabilities down to “a few hundred crores”.
The promoters have contributed their resources and time, divested non-core businesses to create a “completely new resurgent SPIC”.
The fertiliser plant at Tuticorin will restrict itself to the production of urea alone. Efforts are on to shift from naphtha feedstock to liquified natural gas, as and when it is available. An engineering study is on and soon the infrastructure will be in place.
The company had to stop production in August due to water shortage.
But with the revival of the monsoon, it would recommence production once water supply resumes. In 2011-12, it produced the full licensed capacity of over six lakh tonnes of urea.
Following the restructure scheme, the equity holding of the main promoters increases to over 47 per cent from 35.81 per cent and that of the Tamil Nadu Industrial Development Corporation, a State-run industry promotion agency, drops to 4.3 per cent from the present 5.3 per cent.
Public holding drops to 25.95 per cent from 31.77 per cent earlier, and that of institutions and corporates to 13.7 per cent from 16.77 per cent.