Swiss Challenge: Banks seek bids as Matix Fertilisers puts OTS on table


Lenders, who account for approximately 70.74% of the outstanding debt, have agreed to the terms of the OTS offer, which other interested parties can now match or better through the Swiss Challenge process.

A consortium of lenders led by IDBI Bank on Wednesday sought bids against a one-time settlement (OTS) offer made by the promoters of Matix Fertilisers and Chemicals for its debt of around Rs 4,000 crore. Lenders, who account for approximately 70.74% of the outstanding debt, have agreed to the terms of the OTS offer, which other interested parties can now match or better through the Swiss Challenge process.

According to a document issued by SBI Capital Markets (SBICaps), the principal rupee loans owed by Matix to 11 lenders is Rs 3,222.55 crore. The company has foreign currency borrowings, too. Apart from IDBI, the other lenders in the consortium are Punjab National Bank (PNB), Axis Bank, Central Bank of India, Canara Bank, Bank of India (BoI), State Bank of India (SBI), Union Bank of India, EXIM Bank, Bank of Baroda (BoB) and IIFC (UK).

“Since the ability of the company to service its debt obligation has been adversely impacted due to unavailability of gas and working capital, lenders signed an inter-creditor agreement on July 05, 2019, for resolution of the debt outstanding,” the document said. SBICaps was then mandated by the lead bank for the resolution of outstanding debt of the company. On September 15, 2020, Matix submitted its OTS offer for full and final settlement of all debt outstanding with the lenders. The lead bank responded to the letter on September 17, 2020, which was accepted by Matix.

The interested lenders are now soliciting bids for settlement of their debt through the Swiss challenge method, with the existing OTS offer as the anchor offer. “Other lenders who would subsequently agree for settlement of their total outstanding debt, would also get included in the above-mentioned process. However, the interested bidders would have an option whether to include a bid for such lenders who would subsequently agree for settlement,” the document said.

The company has set up a gas-based greenfield urea manufacturing plant at Panagarh Industrial Park, West Bengal. The plant has a capacity of 2200 TPD (0.73 mtpa) of anhydrous liquid ammonia and 3850 TPD (1.27 mtpa) of prilled urea, along with 54 MW captive power plant, a dedicated water reservoir, railway siding, steam generation and other utilities. The company started production from October 1, 2017 at nominal capacity but could operate the plant only for 45 days. It had to suspend operations for want of working capital and availability of adequate gas. “Thereafter, the plant has been non-operational although it continues to be well preserved and is ready to restart production on receipt of gas and completion of balance capex,” the document said.

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