SPIC pledged entire holding in subsidiary TAC in 2005

16-Feb-09
Southern Petrochemicals and Industries Ltd (SPIC), is reported to have pledged its total holding in subsidiary Tuticorin Alkali Chemicals and Fertilisers Ltd (TAC) in 2005, barely 4 years after the company went public. SPIC and TAC have AC Muthiah as their chairman, and both are now not operational due to severe liquidity crunch. For what purpose the money thus raised was used is not immediately clear. The other major stakeholders in TAC include Delhi Iron Steel Company, which holds 5.12%, South Indian Bank, IFCI, Amith Steels Ltd and Prakash Finance Pvt Ltd. TAC depends entirely on SPIC for its feedstock, and has stopped production ever since its parent company was forced to shut its operations after the lenders refused to provide any further working capital credit to the company. SPIC has a total outstanding debt to the tune of Rs 2,300 crore while its assets were valued by Ernst & Young at Rs 1,550 crore. A recent Supreme Court hearing has aborted the final hope of the promoters to restart operation of SPIC by setting aside an earlier order by the Debt Recovery Tribunal (DRT) directing the lenders to open a Rs 13-crore per month lifeline to SPIC to meet working capital requirements. Currently, there seems to be no hope of recovering the outstanding debt from SPIC unless the management comes out with a viable restructuring plan including roping in a strategic partner. Unless it happens no lender would be able to open any fresh line of credit to the company including working capital loans.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha
Complete Herbert Olbrich cushion vinyl flooring line

Complete Herbert Olbrich cushion vinyl flooring line