The Telegraph
Since 1st March, 1999
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Shalimar Paints keen on J& sans its debt

Calcutta, July 17: Shalimar Paints may consider buying out Jenson & Nicholson if the latter could rid itself of its Rs 150-crore debt.

Jenson says it is going to pare its indebtedness by half by bringing in fresh investments. Final touches are being given to Jenson’s debt recast plans, which should get a final shape next week.

S. L. Agarwal, managing director of Shalimar Paints, said: “We would consider taking over Jenson if it could get rid of its huge debt burden.

“S. P. Sinha (the promoter-chairman of Jenson) had approached us with a proposal for a tieup between the two companies some four months ago. We told him we would consider it.”

Jenson has since appointed Judis Moneta — a Singapore based investment bank — to broker a settlement with lenders and scout for investors who could bail the company out.

Karan Judge, managing director of Judis Moneta, said: “We should be able to cut Jenson’s borrowings by over 50 per cent, and substantially reduce the interest commitment on the rest by raising funds overseas.”

The promoters of Jenson — the Sinha family based in Patna — have indicated that they would not commit fresh capital to the paints business.

Berger Paints had, in the past, conducted a due diligence of Jenson, but was intimidated by its indebtedness.

Agarwal said if Shalimar acquired Jenson, it could raise funds from institutional lenders or its promoters — the Jhunjhunwala and Jindal families. Shalimar completed repayment of its borrowings last month.

Judge said the Shalimar MD’s comment “confirmed the intrinsic value of Jenson”. “The problem is cut out — the debts will have to be retired,” he added.

Unveiling Shalimar’s targets, Agarwal said, the company that earned Rs 160 crore between July-June-03, was expecting a 25-30 per cent rise in income in the financial year ending in June-04.

Shalimar is not the first company to evince interest in Jenson.

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