Financial Daily from THE HINDU group of publications
Saturday, Jun 26, 2004
Financial Daily from THE HINDU group of publications Saturday, Jun 26, 2004 |
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Corporate
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New Projects AP Paper Mills to implement Rs 554-cr development plan Our Bureau
Mr L.N. Bangur, Chairman, Andhra Pradesh Paper Mills Ltd, sharing a light moment with his wife, Ms Alka, and daughter, Ms Sheela, after a press conference in Hyderabad on Friday. Ms Alka and Ms Sheela are on the board of the company. — A Roy Chowdhury
Hyderabad , June 25 ANDHRA Pradesh Paper Mills Ltd (APPM) has embarked upon a Mill Development Plan (MDP) involving an outlay of Rs 554 crore to be implemented in two phases. While the first phase is scheduled to be completed by 2006, the second phase will be completed by March 2007. The MDP envisages increase in the company's installed capacity from 1,53,500 tonnes per annum to 1,97,700 tpa and modernisation of its two mills located at Rajahmundry and Kadiam in Andhra Pradesh. It is aimed at improvement of technology, achieving energy efficiency, marketability and long-term environmental compliance. It will also help the company replace the recycle paper at its Coastal Papers Ltd in Kadiam with virgin fibre for making high-end value-added products, according to APPM Chairman, Mr. L.N. Bangur. He said that the implementation of the MDP would lead to substantial reduction in variable costs and improve sales realisations. After this, the company's revenues were projected to go up to Rs 600 crore per annum with profits in the range of Rs 90 crore. In 2003-04, the company's turnover and net profit stood at Rs 450 crore and Rs 23.36 crore, respectively. Mr Bangur told presspersons here on Friday that the MDP would be financed through internal accruals of over Rs 240 crore and the remaining Rs 310 crore by way of term loans, debentures and equity. The company had received a letter from International Finance Corporation (IFC) sanctioning a loan up to $35 million and equity participation up to $5 million for part-financing the MDP. The terms of raising equity share capital are being worked out. Apart from IFC, he said, the company had approached DEG of Germany for loan as well as equity component in the project and State Bank of India, Canara Bank and IL&FS for domestic funding. The project would be funded with an overall debt equity ratio of 1.25:1 including loans in foreign currency as well as rupee loan. The current equity of APPM is Rs 11.8 crore. It would go up to Rs 20 crore after MDP and the holding of Mr L.N. Bangur and Associates in the company would decline from the existing 68 per cent to about 55 per cent.
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