Business Daily from THE HINDU group of publications
Wednesday, Sep 13, 2006

Cross Currency

Group Sites

Corporate - Sick Units
Duncans Industries to be referred to BIFR

Kohinoor Mandal
Nilanjan Dey

Total accumulated losses erode net worth

Adverse situation
Had a dispute with the Centre over Retention Price Subsidy scheme.
The March 31, 2006, balance sheet has shown a negative net current asset of Rs 239.39 crore.
As per restructuring package, Duncans is issuing CRPS to its lenders.

Kolkata , Sept. 12

Duncans Industries Ltd, the flagship company of the city-based G.P. Goenka Group, is being referred to the Board for Industrial & Financial Reconstruction (BIFR).

The board of directors of Duncans Industries has decided to make the referral because the total accumulated losses of the company have completely eroded its net worth.

Duncans Industries, which has operations in fertiliser and tea, has been facing an adverse situation for the last few years following its dispute with the Union Government over the Retention Price Subsidy (RPS) scheme.

Big losses

As on March 31, 2006, the company clocked a turnover of Rs 173.36 crore but ended with a net loss of Rs 798.89 crore because it provided for Rs 446.94 crore — the disputed subsidy amount — in the profit & loss account.

As a result its total accumulated loss jumped to Rs 954.40 crore as against Rs 155.50 crore on March 31, 2005. The March 31, 2006, balance sheet of Duncans Industries has shown a negative net current asset of Rs 239.39 crore. The company fought a futile legal battle against the Centre at the Allahabad High Court on the RPS issue. Subsequently, its Special Leave Petition was also disallowed by the Supreme Court.

Meanwhile, as per the terms of the restructuring package sanctioned under the CDR (Corporate Debt Restructuring) mechanism, Duncans Industries is issuing cumulative redeemable preference shares (CRPS) to its lenders.

A total of Rs 160 crore of CRPS would be issued and it would have a negligible interest rate of 0.001 per cent. CRPS would be redeemed in five annual installments starting from 2019-20. In order to accommodate the CRPS, the authorised share capital of the company is being increased to Rs 225 crore from Rs 150 crore.

In another significant development, Duncans Industries has decided to make a foray into the cash-rich real estate development business. The move is seen as a desperate attempt to change the fortunes of the company.

A special resolution has already been proposed for the shareholders' approval at the next annual general meeting of the shareholders. Sources said that the company is contemplating building residential and commercial buildings in one of its 10 tea gardens located in North Bengal.

More Stories on : Sick Units | Fertilisers | Tea

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Hyundai to set up R&D centre in Chennai

Grasim launches five new fabrics
Seminar on human resources
To HLL, BPO was just another `functional silo'
Daewoo Electronics takeover: Videocon may sign MoU by month-end
Patel Engg acquires Mumbai-based co
ICSI looking at global opportunities
Corporate governance course
Bajaj `Crystal' scooter to have DTSi technology
Sandvik Mining opens new facility at Pune
MCX to set up commodity bourse in Asia-Pacific region
Aurobindo gets FDA nod for Citalopram
Airco-Fin Holding signs pact with Indian venture
ONGC to team up with Petrobras
Punj Lloyd jt venture with Swissport
Cusat to hold global seminar on corporate social responsibility
Asian Tea to diversify into real estate, tea tourism
Duncans Industries to be referred to BIFR
Toyota Kirloskar Auto plans to raise production

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line