Ruchika M Khanna
Tribune News Service
Chandigarh, April 25
The disinvestment of the state government undertaking Punjab Alkalies and Chemicals Limited (PACL) could finally take wings with the state’s smart move of converting the company’s debt of Rs 43 crore into equity by banks and financial institutions.
With Securities and Exchange Board of India (SEBI) recently allowing listed borrower companies (PACL, in this case) in distress to convert their debt into equity by the lending institution, the state Industry Department quickly seized the opportunity to convert its debt of Rs 43 crore, taken from IDBI Bank and sother financial institutions, into equity.
With this, the percentage shareholding of the Punjab State Industrial Development Corporation (PSIDC) in the PACL has come down from 44.26 per cent to 27.7 per cent, while that of joint lenders, led by IDBI Bank, has gone up to 37.43 per cent.
PSIDC Managing Director Yogesh Goel said the matter had been approved by the board of directors of the company. The conversion of the entire debt (Rs 43 crore), which had to be paid before April 1, 2015, has been done at the rate of Rs 35 per share. “The company is now debt-free. It will increase prospects of disinvestment of the government stake in the company. Approximately, 90.9 lakh shares are to be disinvested,” he said.
The state government has been trying hard to disinvest its stake in the PACL. At least four unsuccessful attempts have been made to disinvest government stake in the company that manufactures caustic soda at its plant in Naya Nangal. It has an installed capacity to manufacture 99,000 tonne per annum (tpa) caustic soda.
The latest attempt to sell government stake in the company failed on February 13 this year, when four companies having passed the pre-bid stage — Aditya Birla Chemicals (India) Private Limited, Nirma Limited, Punjab-based Kudos Chemie Limited and a consortium of Al Shemail Garments and Perfumes Trading LLC and Avenue Chemicals — failed to participate in the financial bidding.
Sources say this left the PSIDC (which owned 44.06 per cent stake in the PACL) with no option but to either clear the debt of Rs 43 crore from its own pocket or to allow the lenders to take over its shareholding in the PACL. “With new SEBI guidelines coming in, we decided to convert the debt into equity,” said Industry Minister Madan Mohan Mittal.
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