FIs put condition for JCT recast

The FIs led by Industrial Finance Corporation of India IFCI have already set strict terms for the company8217;s debt restructuring. The terms include, appointment of concurrent auditors, reconstitution of the board, constitution of an asset sale committee with FI nominees and infusion of Rs 100 crore through an escrow account.

Earlier, the company had decided to hive off some its real estate properties in Mumbai as a strategy to generatesome cash repayment. It even appointed RK Signhal amp; Co for the purpose. However, owing to a depressed real estate market, the company failed to get a proper price for its proposed sales.

JCT had also put on sale its steel division, which manufactures wire drawing units, and was in talks with Tatas and Jindals. However, with the recession hitting the steel sector, the plans are yet to materialise.

Currently, JCT is expecting over Rs 10 crore from the sale of surplus land at its Phagwara unit. Further, the company is hoping to generating over Rs 20 crore from the sale of its steel division. JCT is, however, believed to have put on hold its plans for selling off its polyester unit.

Meanwhile, the company has finalised a list of three professionals to be inducted in the company8217;s reconstituted board and appointed TR Chaddha amp; Co as the concurrent auditors.

JCT has also intimated the FIs its inability to infuse Rs 100 crore immediately into the company and asked to review the amount as it has alreadyinvested Rs 80 crore during 1997-98. The company has also asked the FIs for allowing six months to bring in the fresh funds.

JCT8217;s problem of debt restructuring began with its Rs 400-crore sell-off deal with Indonesia-based Polysindo falling through. The two parties failed to arrive at a conclusion regarding the price, as JCT management refused to agree on a lower amount after Polysindo reviewed the price from proposed Rs 520 crore to Rs 406 crore.

Modern may sell terry towel unit
NEW DELHI: The Modern group plans to put its 100 per cent export oriented terry towels unit 8211; Modern Terry Towels 8211; up for sale. The group has informed the the FIs about this move following its failure to sell Modern Denim to raise funds for working capital requirement of other group companies by the December 1998 deadline. As part of the restructuring plan submitted to financial institutions, the promoters had promised to bring in Rs 50 crore as interest free funds for other group companies from sale of ModernDenim.

The promoters had also agreed that in case they fail to do so the financial institutions would have the automatic right to put on sale the particular asset or any other asset in the group. The group has told the FIs that it was not able find a buyer for Modern Denim due to depressed market conditions. The group had engaged Jardine Fleming and ANZ Investment Banking to find a suitable buyer for Modern Denim.

Significantly, on the basis of this clause FIs had given an in-principle approval to the debt restructructuring of the group envisaging sacrificing of overdues up to Rs 40 crore. Modern group8217;s total outstanding with the FIs and banks is estimated to be over Rs 700 crore. Institutional sources further said that the FIs were earlier considering moving court in order to enforce sale of assets in the group.