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Corporate - Restructuring


Elque Polyesters' promoters keen to shed entire stake

Badal Sanyal

KOLKATA, Oct. 9

EVEN as fresh schemes for restructuring the loans from FIs and banks by Elque Polyesters Ltd (EPL) are in an advanced stage of preparation, the principal promoters of the company - Abijit Sen and associates - are believed to be in a mood to sell their entire equity stake in the company provided they get "worthwhile'' offer. This is learnt from an authoritative source.

The principal promoters have direct control over 70 per cent of the total Rs 44 crore paid-up equity capital of the company, leaving about 27 per cent of the total equity to FIs and about three per cent to public.

The company during the year ended March 2002 earned cash profit of Rs 16.21 crore and a net profit of Rs 7.28 crore on a total sales turnover of Rs 91.80 crore as against a net loss of Rs 11.91 crore in the previous year.

The company produced 20,623 tonnes of PET resin from its Rs 130-crore state-of-the-art plant at Falta Export Processing Zone in West Bengal, set up about five years ago in technical collaboration with Sunkeyon Corporation of South Korea.

Though EPL earned a net profit during the year under review, it is still saddled with a financial liability of Rs 100 crore after having reached one-time debt settlements with IDBI and UTI.

Of the total existing liabilities, the company is reportedly discussing with SBI for reaching a one-time debt settlement of Rs 60 crore leaving an overseas loan of Rs 40 crore to be settled in due course of time.

When contacted, a senior level EPL source told Business Line that the principal promoters might consider selling their stake in EPL even though the company has a bright future following steady growth in demand for PET resin within the country and abroad.

In India, the demand had increased from 70,000 tonnes in the financial year 2000-01 to 85,000 tonnes in 2001-02 and the projections indicate that the demand will be about 1,00,000 tonnes per annum in the forthcoming years.

It is, however, learnt that the same promoters are on the lookout to set up a 600-tonne per day PET resin project in one of the CIS countries, entailing an investment of $41 million.

Much progress has been made towards this project, while the financial closure of the project is expected shortly. It is thus presumed that the principal promoters of EPL may prefer to shift their centre of business activities overseas.

The EPL source said that the company's Falta plant was currently producing 105 tonne of PET resin per day, and was expected to achieve 150 tonne per day utilising the existing plant and machinery. The company's "SENPET'' brand PET resin was reintroduced in the international market, and about 12,000 tonnes of PET resin was exported to East European countries and the US.

The source said that the company was also receiving a lot of repeat orders both from overseas and domestic markets.

However, due to anti-dumping duty still prevailing in Europe, applicable on PET resin of Indian origin and others, it was not possible to enter other countries in the European market.

Incidentally, it may be mentioned that EPL was declared sick in January 2000 by the Board of Industrial and Financial Reconstruction (BIFR) and IDBI was appointed as the Operating Agency (ODA) to prepare a feasible revival scheme for the company.

The recent one-time debt settlements with IDBI and UTI were considered the beginning of the process of making EPL a debt free company.

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