SPIC referred to BIFR

Chennai: Southern Petrochemical Industries Corporation (SPIC) has been referred to the Board for Industrial and Financial Reconstruction (BIFR), consequent to an erosion of the company''s net worth to less than 50 per cent of its highest net worth in the previous four years.

The company has called for a meeting of its shareholders to "consider such erosion." In a notice to the shareholders, SPIC said that on account of accumulated losses, there has been a "significant reduction" in the net worth of the company. The net worth stood at Rs 10.93 crore as on 31 March 2003 as compared to the peak net worth of Rs 653 crore in 1999-2000.

The company has attributed five reasons for the erosion of net worth: 1. Its dead investments in SPIC and the fertiliser project in Dubai 2. Interest and exchange fluctuation incurred up to 31 March 2000 on the floating rate notes issued by the company for Rs 116.28, which had to be written off during 2002-03 3. The drought last year that resulted in poor fertiliser off-take 4. A problem compounded by the non-receipt of fertiliser subsidy from the Indian government in time 5. The prospects of the engineering consultancy division being hampered by fund constraints