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Surat Textile Draft Rehabilitation Scheme approved
05
Feb '08
Surat Textile Mills Ltd has informed that with reference to the hearing held on December 24, 2007, at the Board For Industrial & Financial Reconstruction (BIFR) and the copy of the proceedings / order dated January 22, 2008 received by the Company on January 29, 2008.

The BIFR has approved the Draft Rehabilitation Scheme (DRS) forwarded by Industrial Development Bank of India (IDBI), the Operating Agency (OA).

The Scheme inter-alia provides for the following:
1. One Time Settlement (OTS) of the secured debts of the Company amounting to Rs 7741.50 lakhs by payment of Rs 4083 Lakhs. The secured creditors to waive balance of principal, interest, penal interest and other charges upon repayment of OTS amount.

2. Infusion of additional Working Capital of Rs 367 lakhs by the Promoters.

3. Write down of the existing equity capital of the Company under section 18(2)(f) of Sick Industrial Companies Act, 1985 (SICA) by 90%. Upon such write down the face value and paid up value of equity shares of the Company will be reduced from Rs 10 per equity share to Rs 1 per equity share.

The Company shall issue fresh certificates to all shareholders of the Company of the face value of Rs 1 each credited as fully paid up, for every one equity share of Rs 10 each fully paid up held by them.

4. Total cost of scheme of Rs 4450 lakhs will be met by issue of fresh equity share capital at par on a preferential basis in favour of the promoters / strategic investors for an amount of Rs 1550 lakhs in order to reduce further interest cost. The balance amount of Rs 2900 lakhs is to be provided as interest free soft loans by the promoters.

Surat Textile Mills Ltd

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