…… is a knit bleaching unit that was setup in Palakkad in 2006 and has been commercially operating since 2008. The unit is setup on 9,6 acres of land in Walayar, Kerala and has around 23000 sq ft of super built up area.
The unit currently does knit wear bleaching for clients based in Tirupur. Some of the major brands that it caters to are Amul, Lux and Hanes
The company performance has been historically poor due to external factors such as poor market conditions and its high cost structure. The high cost structure is primarily on account of the old machinery that the company uses. Due to the debt loading on the company, the promoters were not in a position to change the machinery earlier and were forced to extend unsecured loans to meet the earlier debt obligations. The company post the initial period was able to turn in positive EBITDA till the demonetisation drive by the government wiped away most of its domestic orders for a considerable period of time. Promoter liquidity also got stretched as funds were used to meet /service debt and all plans to modernise the unit were postponed.
With respect to the current situation,
1. Bank debt
– Term loan – 12 lakhs – Will be closed in November
– CC – 100 lakhs
Both are operating at 15.5 per cent interest
2. We have a phase wise five year plan in place that will lead to the company having a dyeing capacity of 6 metric ton per day and bleaching capacity 10 mt per day . The water, land and the potential customers required for the same are available with the company
3. Although we were initially looking to do an equity dilution to manage the initial part of this operation, we are also open to a debt deal if possible. The company is currently looking
– looking to raise 90 lakhs as term loan for machinery. This will reduce the variable cost considerably and thus the breakeven volume
– Move its CC account to a bank with a better interest rate and look at an enhancement of 25 lakhs
– Some funds around – 50 lakhs to shore up balance sheet by settling with creditors
- : financial_services
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