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Feb 12, 2009, 07.24 PM IST | Source: CNBC-TV18

S Kumars' consolidated EBIDTA seen at Rs 450-480 cr

Nitin Kasliwal, MD of S Kumars, said the total consolidated cash holding of the company was at Rs 130 crore and added that redemption pressures have led to decline in foreign ownership. The net debt of the company, he added, is at Rs 1,170 crore of which Rs 617 crore is its working capital.

Nitin Kasliwal, MD, S Kumars

Nitin Kasliwal, MD of S Kumars , said the total consolidated cash holding of the company was at Rs 130 crore and added that redemption pressures have led to decline in foreign ownership. The net debt of the company, he added, is at Rs 1,170 crore of which Rs 617 crore is its working capital.

 

Debt servicing, Kasliwal said, was not an issue as S Kumar’s consolidated EBIDTA is seen at Rs 450-480 crore.

Here is a verbatim transcript of the exclusive interview with Nitin Kasliwal on CNBC-TV18. Also watch the accompanying video.

Q: Could you clarify two things – what cash levels are you sitting on right now? And arethere are any significant shareholding changes which have happened from institutional investors over the last quarter?

A: On a consolidated basis between SKNL and Reid & Taylor, which is the consolidated company which is S Kumars Nationwide Limited, we are sitting on cash over Rs 130 crore. As far as the shareholding is concerned, our institutional holding currently is in level of about 30%, approximately 49-50% is with the promoters and balance is with the general Indian public.

Q: What is the FII ownership- has it significantly changed in the last one quarter?

A: Over the last one quarter there is no significant change but over the last one year the FII holding which originally used to be at 36% is now down to 30% but that is largely because of a lot of redemption pressures that all FIIs have had. To that extent at 30-31% we are still the largest FII held textile group.

Q: By the end of Q3 what was the total debt S Kumars had on its books and could you split that between the long-term and short-term?

A: Our net debt is about Rs 1,170 crore (eleven hundred and seventy crore) which includes working cap and long-term. Working cap is about Rs 617 crore and the long-term debt is about Rs 560 crore

Q: We believe there has been some conversation with Government of Singapore over valuing Reid & Taylor- could you walk us through the details, the modalities and what kind of valuation has been arrived at?

A: The Government of Singapore has already invested in Reid & Taylor. This deal has already culminated in July’08. The Government of Singapore has valued Reid & Taylor business at USD 870 million which is Rs 3,540-3,450 crore. They have taken a 25% stake and to that order they have put in Rs 900 crore in Reid & Taylor.

It is direct equity deal and it has already been done. So the deal is done, the money is in the bank and of the Rs 900 crore, Rs 790 crore already come to us and balance Rs 110 crore we will draw down when there is capital expansion plan in Reid & Taylor plant in Mysore. The Rs 790 crore ahs already been partly used to prepay down the Corporate Debt Restructuring (CDR) debt of SKNL and to that extent SKNL is now on the last leg of exiting the CDR.

Q: How much cash you are likely to generate over the next 4-8 quarters because we need to get a sense of how easily you will be able to service the debt which is lying on your books?

A: As far as our total cash that we are generating, ofcourse on a consolidated basis even in the current year our EBITDA is going to be in the excess of Rs 450-480 crore. Our total debt is in the region of Rs 1,100 crore including working capital, so debt servicing is not an issue at all. I cannot offhand give you the figures over the next 8 quarters what is the overall cash generation but I can send that to you shortly.  But generally from a debt servicing point of view we are much more than comfortable.

Q: The reason I raised the Government of Singapore issue is because we understand or the buzz is perhaps that the Government of Singapore maybe looking to increase their stake in Reid & Taylor- have you had any such conversation in the past few weeks and are they indeed looking to hike it up all the way up to 49%?

A: We have not had any such discussion and for Reid & Taylor there is not need for further cash at the moment, so there is no question of any further dilution at the Reid & Taylor level.

In any case we do have an agreement and arrangement with the Government of Singapore that any new transaction we do in our group, we will offer it to them first. But as far as the Reid & Taylor Company is concerned there is no such discussion at the moment.

S Kumars Nation stock price

On October 31, 2014, S Kumars Nationwide closed at Rs 4.45, up Rs 0.07, or 1.60 percent. The 52-week high of the share was Rs 7.00 and the 52-week low was Rs 2.65.


The latest book value of the company is Rs 22.15 per share. At current value, the price-to-book value of the company was 0.20.

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