Jain Irrigation Systems expects capital infusion of ₹160 crore from promoters and investors in 18 months.

The company completed the debt resolution on March 25 as per the master restructuring agreement signed in February. Lenders have restructured debt of ₹3,878 crore and converted about 40 per cent of the total debt into long-term Non-Convertible Debentures at an interest rate of 0.01 per cent.

The company issued about 7.89 crore of equity shares to lenders and restructured the overseas bonds of $200 million.

Following debt restructuring, Jain Irrigation had access to additional working capital of about ₹300 crore at a significantly-reduced interest cost.

Debt resolution

“On completion of this debt restructuring, normalcy has been restored to the accounts under the loan facilities granted by all lenders of the company and all past irregularities and defaults stand cured,” said the company.

The debt resolution was invoked in June 2019 after a series of consultations with lenders. It was triggered due to certain delays in debt servicing, induced by extended working capital cycles faced by the company on the back of delay in receipts from the government.

Anil Jain, Managing Director, Jain Irrigation, said the Debt Resolution exercise coincided with the onslaught of Covid, which delayed closure of certain steps in the process.

Workable solution

However, he said the company and lenders found a workable solution to iron out several iterations of certain processes, he added.

The demand for the core business of micro irrigation systems and plastic pipes is very robust and the company is confident of regaining increasing market share in future, it said.

The debt resolution exercise has been a learning for the company in two critical areas of working capital management and cost control, where various measures have been implemented to improve the metrics, he added.

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