JIK Industries completes debt restructuring

Indian crystalware maker JIK Industries Ltd., has completed its corporate debt-restructuring (CDR) programme with its lenders. Under the CDR package, JIK Industries is expected to pay its outstanding …

Indian crystalware maker JIK Industries Ltd., has completed its corporate debt-restructuring (CDR) programme with its lenders. Under the CDR package, JIK Industries is expected to pay its outstanding debt of INR 570-580 million over a 10-year period from 2008. The interest cost has been cut to 9% from its earlier average of 16%. At the pre-debt restructuring stage, the company had a total debt of INR 1.1 billion. Of this, INR 300 million was converted to equity through a deal with its unsecured creditors under Section 391 of the Companies Act. About INR 80 million would be converted into equity by the lenders and INR 110 million has been waived. Another INR 40 million would either be converted into equity or preference shares. “The debt repayment has been aligned to the company“s current operations,” said Mr. Aditya R. Parikh, Vice-President – Finance, JIK Industries Ltd. The company had suffered from accidents at its chemical waste recycling plant and at its crystal-making unit. It was forced to abandon its money changing business after its net worth was eroded and it became ineligible to continue the activity under Reserve Bank of India regulations. Following restructuring, JIK Industries is focusing on its crystal ware manufacturing business. “The margins in this business are very good, therefore we are confident of a good bottomline growth going forward,” Mr Parikh said. At present, JIK Industries“s crystal making unit is partially operational. The company“s strength is in lead-free crystal. Even as the domestic market is picking up the overseas market is showing robust growth. JIK is poised to gain from the upward trend thanks to its skill in hand-made crystal and the cost of operations. The company is currently in the process of expanding capacity.