Nitco expects shareholder approval by June for CDR; promoters to infuse Rs55 crore

Mumbai: Mumbai-based tile maker Nitco Ltd. is undergoing a corporate debt restructuring (CDR) exercise with Rs1,000 crore of loans being recast.

add_main_imageThe tile manufacturer, which suffered heavy foreign exchange losses due to the depreciation of the rupee against the dollar, is trying to turn around its business by cutting imports from China, a measure suggested as part of the CDR package, a company official said.

It used to import nearly 65% of its tile requirement from China. NextMAds

“But we have drastically cut our imports from China to reduce our exposure to foreign exchange fluctuations,” said B.G. Borkar, chief financial officer at Nitco, without disclosing how much the company is importing at present.

The implementation of the CDR package will be completed in the next two-three months. The promoters also need to bring in Rs55 crore worth of equity, of which Rs28 crore has already been infused, Borkar said. While the CDR package was approved by the empowered group of the corporate debt restricting cell in December 2012, shareholder approval is still pending.

“The shareholder voting will happen over the next month,” said Borkar. As a part of the restructuring, the interest rate on repayment of liabilities has been reduced to 11% from 14%. Punjab National Bank is leading the consortium of lenders and IIFL Ltd. has been roped in for the restructuring process.

Nitco’s net loss for the October-December quarter of fiscal 2013 widened to Rs65 crore from Rs53 crore in the quarter before. However, total sales for fiscal 201-12 stood at Rs840 crore and total assets at Rs1,060.5 crore.

Nitco entered into a joint venture with Surat-based tile maker New Vardhman Vitrified Pvt. Ltd. in March last year in order to cut imports from China.

Nitco holds a 51% stake in the venture, which manufactures vitrified tiles in Wankaner, Gujarat. sixthMAds

Shares ended at Rs15.30 on BSE Ltd., down 3.77%, while the benchmark Sensex fell 0.25% to close at 20,062.24 points.