As on March 31, 1998, the company had a credit balance of Rs 286.48 crore in the share premium account. Even after writing off the losses, the company will continue to incur losses for at least one year. The company has already projected a net loss of Rs 70.89 crore for the nine-month period ended December 31, 1998.

The company has projected an operating loss of Rs 19 crore on sales of Rs 660 crore. The company has been hit by high operational expenditure and interest cost. The company has projected an interest cost of as high as Rs 58 crore for the nine-month period. However, the company has alreadydrawn up plans for a major financial restructuring and will be repaying its high cost loans. As part of its financial restructuring, the company is taking the equity route to replace high cost debt by planning a Rs 76.12 crore 1:1 rights issue.

As the company is charging a premium of only Rs 2 for the rights issue, there will be an addition of just Rs 12 crore to the share premium account. Post-rights, the paid up capital will rise from Rs 63 crore to Rs 126 crore. Besides the savings on interest cost, the leverage of the company will improve.

Whirlpool has drawn up a Rs 126-crore financial restructuring plan.

Of this, Rs 107 crore will be utilised for repaying high cost debt and Rs 18 crore as margin money for its working capital requirements. Besides the proposed rights issue, the company has already raised Rs 50 crore through private placement of AAA non-convertible debentures. NCDs with a coupon of only 13.75 per cent will be repaid in three instalments at the end of fourth, fifth and sixth year inthe ratio of 30:30:40. This will help the company to save on interest cost. Whirlpool has a foreign currency liability of Rs 130 crore.

At present, the company manufactures direct cool refrigerators (capacity 10 lakh units per annum), frost-free refrigerators (3.9 lakh per annum) and washing machines (2 lakh per annum). The promoters of the company are Whirlpool Corporation and its subsidiaries, Whirlpool Mauritius and Whirlpool Financial Mauritius. The products are marketed under the brand, `Whirlpool'. The company has a distribution network of 1500 distributors spread over 700 locations and has access to 5,000 retail outlets.