Nod for Ester plan to switch cumulative preference shares
Our Market Bureau
MUMBAI, January 4: The preference shareholders of Ester Industries Limited have passed a resolution to permit the conversion of redeemable cumulative preference shares (RCPs) into cumulative convertible preference shares.The move will be subject to conditions laid down by the company's board of directors. According to an intimation to the Bombay Stock Exchange, the preference shareholders -- which include institutions like IFCI, IDBI, ICICI, UTI and a few nationalised banks -- have agreed for the conversion of 1.20 lakh 10 per cent RCPs into 12 lakh equity shares of Rs 10 each aggregating Rs 1.2 crore. As part of a rehabilitation plan, the company had earlier issued 10.03 lakh, 10 per cent RCPs of Rs 100 each aggregating Rs 10.03 crore to financial institutions and banks. In 1988, the company had put up a Rs 84.4-crore project, which faced several teething troubles. Along with soaring interest rates and forex fluctutations, the project cost escalated to Rs 130 crore. The company registered accumulated
losses of Rs 63 crore and also had huge interest outstandings. The FIs then came to the rescue of the company and put forward a rehabilitation programme, rather than have the company referred to the BIFR. Of the total interest of Rs 40.55 crore due to them in March 1993, compound interest of Rs 8.93 crore and penal interest of Rs 4.47 crore was waived. The remaining Rs 27.37 crore was adjusted partly by a rights issue and partly by issuing the RCPs. The 10 per cent RCPs were redeemable in three yearly instalments of Rs 2.25 crore in 1996-97, Rs 4.63 crore in 1997-98 and Rs 3.15 crore in 1998-99.Meanwhile, the company's scrip has been quoting at Rs 9 for some time now. Ester Industries, which manufactures polyster chips, polyester film and dope-dyed polyster filament yarn, has been promoted by Sitaram Singhania, managing director of Lohia Machines, and a Singapore-based NRI businessman.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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