It may be recalled that financial institutions have advanced in excess of Rs 600 crore as loans to Spic to part-fund its SPC project for manufacture of purified terepathalic acid (PTA) and other products. Together with interest costs the amount due for repayment to FIs worked out to Rs 800 crore.

Finding itself caught in a bind because of its dispute with Madras Refineries Ltd over the Arochem joint venture, Spic had to suspend operations on SPC project owing to court orders. However, now that a solution is being hammered out to salvage the SPC project with an out of court settlement between Madras Refineries and Spic, the Spic management is seriously engaged in restructuring the loans and interest payment schedules.

Spic vice-chairman and president AC Muthiah in an informal chat with reporters here on Wednesday said Spic is still awaiting the formal cabinet clearance for the settlement proposal in the Arochem dispute between Spic and Madras Refineries. He said the petroleum ministry has approved the proposal and the company is awaiting the cabinet nod before commencing to settle claims of Madras Refineries.

It may be recalled that after the Madras Refineries board decided to withdraw from the Arochem project, Spic had agreed to settle by paying out to Madras Refineries its investments amounting to Rs 13 crore and an additional Rs 14 crore as interests thereof. The settlement also provides for Madras Refineries to withdraw its court cases against Spic and allows Spic to retain 100 acres of land for the SPC project and handover a balance of some 200 acres back to the Tamil Nadu government.

According to Muthiah, once the process of pay-out is over, Spic will go ahead with its plans to merge SPC and Arochem. It is still scouting for a joint venture partner to execute the SPC-Arochem project.

Meanwhile, Spic Electric Power Corporation (SEPC) is exploring options to rope in ABB as its EPC contractor for the 525mw coal-based thermal power project coming up at Tuticorin. Muthiah said SEPC was willing to give 25 per cent equity to ABB in the project and is also talking to others like Black Veatch. All other clearances including the coal pricing issue from TNEB has been obtained for the project but Muthiah said the project cannot be executed without escrow cover which is still to be put in place.

Spic is also keen to finalise the merger of Manali Petrochemicals with Spic Organic Chemicals Ltd (SOCL) and has mooted talks with financial institutions for getting their approval.