Arvind Mills debt recast scheme approved

Pradeep Rane
09 April 2002

The board of directors of Arvind Mills had, at its meeting held on 11 February 2002, approved the restructuring proposal of the company. Under the scheme, the company will issue up to 40.30 million convertible warrants to its lenders. It will also issue up to 1.30 million secured optionally partly convertible debentures of Rs 500 each, aggregating to Rs 650 million to lenders.

Under this, one part of Rs 100 each will be optionally convertible into equity shares at a later date. The second part of Rs 400 each will be nonconvertible, and the third will consist of five detachable warrants, which will be converted into equity at a later date.

The issue of these securities was approved by the shareholders of the company at their extraordinary general meeting held on 12 June 2001. As per the provisions of Securities and Exchange Board of India guidelines 2000, the resolutions passed by the shareholders approving these issues have lapsed after the expiry of a period of three months from the date of their passing.

Hence the issues have been approved again by the board of directors with the modification that up to 1.30 million debentures are proposed to be issued in place of up to 1 million debentures as proposed earlier. The consent of the company's shareholders has been sought at the next annual general meeting.

Arvind Mills had posted a net loss of Rs 216.30 million for the quarter ended 31 December 2001 as compared to a net loss of Rs 862.40 million for the quarter ended 31 December 2000. The total income for the quarter ended 31 December 2001 is at Rs 3618.40 million as compared to Rs 3071.30 million in the quarter ended 31 December 2000.

Commenting on the performance, Arvind Mills managing director Sanjay Lalbhai said: While the continued upsurge in the denim market has definitely helped, the management has taken several strategic initiatives to bring about permanent changes that will ensure improved performance even during the not-so-favourable macro-level environment.