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Accounts agony looms on Duncans

Calcutta, Sept. 9: Duncans Industries, which is saddled with a Rs 600-crore debt burden, is in for a stormy annual general meeting tomorrow.

The company is not ready with the accounts for the eighteen-month period ended March 31 and this may create quite a stir among shareholders.

“The shareholders may raise questions. But in the present circumstances we are unable to come out with the accounts,” chairman G. P. Goenka told The Telegraph.

“The Kanpur Electric Supply Company has snapped all connections at our fertiliser factory at Panki, Kanpur, due to non-payment of dues. As a result the computers were down and the accounting books and records of the fertiliser division, which are maintained at the factory, could not be accessed,” he said.

The Kanpur factory is closed since March 2002. The company declared a lay-off from July 1, 2002.

The company decided to down shutters at the fertiliser unit when the government demanded Rs 365 crore from the company due to downward revision in retention prices. The company enjoyed fertiliser subsidy in the form of retention price support from the government.

Fixed deposit holders

Fixed deposit holders who had together invested Rs 90 crore in the company will have to wait for quite some time before they get back their investments.

State Bank of India, Duncans Industries’ lead banker, which is currently working on the corporate debt restructuring of the company has included the fixed deposit holders in the restructuring package. Similarly, the two main creditors of the company — KESCO and Indian Oil Corporation — have also been included in the package.

The company has not been able to service the fixed deposit holders according to the scheme worked out by the Company Law Board.

SBI Capital Markets has carried out a detailed study of the profitability and operations of the company, Goenka said. Based on this report, a core committee of the lenders, which include ICICI, IDBI and other banks, has proposed a restructuring package.

The restructuring package envisages — recommencement of the operations of the fertiliser plant (for which necessary funds will be provided by the banks), reduction in the rate of interest, funding of interest, reschedulement of repayment of loans, phased divestment of certain assets and utilisation of the sale proceeds for debt repayment, waiver of liquidated damages and infusion of additional funds by the promoters.

Goenka said SBI will refer the Rs 600-crore package to the CDR cell soon.

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