Spic ropes in Anderson, TCS for rejig
By Praveen Chandran | 09 Mar 2002
Mumbai: Southern Petrochemical Industries Corporation (Spic), the AC Muthiah group’s flagship company, has kick-started its second round of restructuring. The company has roped in two consultants — Arther Andersen and Tata Consultancy Services — to advise the company management in the restructuring process.
The consultants have been asked to look into Spic’s various lines of the business activities, such as fertilisers and petrochemicals, and to submit a ‘what -needs-to-be-done’ report to put the group back into energised action.
The general slowdown in the chemical and fertilisers segment has affected the growth prospects of Spic, with the general sales of the company declining steadily on a quarter-on-quarter basis. The high interest rate outgo has also put Spic in a high liquidity crunch problem.
The company had closed the third quarter ended 31 December 2001 in red with a net loss of Rs 49.56 crore. The total sales of the company also dropped to Rs 445.11 crore from Rs 571.77 crore recorded during the corresponding quarter in the previous year.
The company has been facing severe liquidity crunch with interest charges mounting to unsustainable levels. The interest charges of the company were to the tune of Rs 54.16 crore during the third quarter of the current fiscal, as against Rs 50.49 crore during the corresponding period in the previous year.
The group is currently in talks with its creditors for restructuring its loan portfolio to ease the liquidity flow. In the first round restructuring, the company had strategically withdrawn from its non-core businesses by divesting its stakes in its various joint ventures.
Last year, it sold its entire stake in Spic PHI Seeds to the foreign partner PHI for a consideration of Rs 73.02 crore. Recently the company also divested its entire 49-per cent stake in the LPG joint venture, Caltex Spic India, to Caltex for a consideration of Rs 30 crore. Caltex Spic, which markets the Spic Jyoti brand of LPG, was incorporated in 1996 and has been a major player in the southern markets.