Expect to be in the black in FY12: Pioneer Embroideries

In an interview with CNBC-TV18’s Ekta Batra and Reema Tendulkar, Harsh Vardhan Bassi, MD of the company, gave his perspective of the third quarter performance and divulged future plans.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: Can you break up your net sales in terms of segments and geographic locations? How have you done in terms of exports and domestics, and segments, this quarter?

A: I would not be able to give you the break up, but we have done pretty well in exports this quarter. The domestic sales have also been very good and healthy, especially on the polyester dope dyed yarn segment followed by our core business, embroidery.

Q: You all have been in the corporate debt restructuring (CDR) cell for about two and a half years. What is the current debt situation of the company? Even this quarter, you all have managed to reduce your interest cost and that has helped your profitability? How do you expect your interest costs to pan out? How do you plan to repay your debt?

A: We are making efforts to match the CDR projections. As part of our package, we had converted some part of the debt into optionally convertible cumulative redeemable preference shares (OCCRPS). We have done a one time write back of the interest, which is visible here.

Apart from that, the working has also been healthy this quarter. Even the last quarter was quite alright and the endeavour would be to augment that. Actually, the tenure in CDR is about 10 years, but we are making a serious effort to exit at the earliest.

Q: Can you give us a figure of your term loans?

A: Currently, our term loans should be around Rs 110 crore and working capital will be around Rs 40 crore.

Q: You have also approved some fund raising in November worth around USD 50 million. What is the update on that?

A: We are making some efforts in that direction. That was for the global depository receipt (GDR). We have taken the approval and are working towards it.

Q: What will the fund utilisation be? Would it be to pay back this Rs 100 crore of loans, which you are outstanding?

A: We will see. Primarily, we would want to use the money to expand our polyester yarn business. Currently, we are in the midst of a small expansion. We are expanding our capacity at our polyester yarn unit in Himachal. If we manage to go through the GDR route, it would be to further expanding capacity.

Q: You went out into an MoU for sale of a Bangalore property. When will that fructify? How much will it yield in terms of market value of this land?

A: I would not want to comment on the Bangalore property, right now. We have a small labour issue, but that will be sorted out pretty soon.

Q: What is the market value of this land currently?

A: I would not want to comment on it, right now.

Q: You also have outstanding foreign currency convertible bond (FCCB), which are worth USD 11 million. When are they convertible and at what price?

A: We have already signed an agreement with the bond holders post settlement. We are in process of making them payments. We have already paid this amount in part, as per RBI norms. We are hopeful of clearing this amount shortly. It is a binding agreement on both the sides.

Q: You have turned around your profit figures this quarter and possibly even last quarter. What is the expectation? Would you expect to be in the black, going forward?

A: Yes, for sure.