Ahmedabad-based Pradip Overseas (POL) has been forced to opt for corporate debt restructuring (CDR), owing to volatility in cotton prices coupled with just 50 per cent production capacity utilization. After having received banks' and financial institutions' nod, the company received an approval from its Board of Directors for CDR. While it is looking at turning a part of working capital into a term loan, the company has also sought to convert the interest on current debt into funded interest term loan (FITL). It has a total debt of Rs 1,100 crores. But it’s going for a corporate debt restructuring (CDR) and asking for a 10 year term. At the end of the term, the total debt will not exceed a limit of Rs 1,750 crores. Since it is unable to pay interest and hence it has sought to convert it into funded interest term loan (FITL).
The company owes the debt to a consortium of banks and financial institutions led by State Bank of India (SBI) and Canara Bank, Allahabad Bank among others. Pradip Overseas' textiles manufacturing capacity is around 140 million metres per annum, though the running capacity utilisation is only 70 million metres per annum.
