NCL Industries on Tuesday successfully exited from the Corporate Debt Restructuring (CDR) mechanism, said K Ravi, Managing Director, NCL Industries. "Now there are no more capex restrictions levied and we are free to grow," he told CNBC-TV18.Ravi says cement prices are very encouraging and the company plans to expand its cement business.The company's interest costs are at 16 percent, according to Ravi. Below is the verbatim transcript of K Ravi's interview with Mangalam Maloo and Reema Tendulkar on CNBC-TV18.
Mangalam: With the company now exiting the corporate debt restructuring (CDR), what does this mean for them, what does it do to your finance cost?
A: The CDR exit means now we are free, earlier we had all the restrictions for capital expenditure (capex) and all that. So, now we have closed all the banks and paid and CDR also issued a letter stating that you are exited from CDR. Now we are free to grow.
Reema: Could you tell us what the debt on the books is currently, to exit the CDR did you have to convert some part of your debt into equity. Give us some terms?
A: In fact, Piramal Enterprises is giving us as Rs 325 crore as non-convertible debentures (NCDs), out of that Rs 125 crore we have paid to the existing bankers. The term loans are no more term loans, we had cleared all the term loans of all the bankers. However, another Rs 200 crore we are spending on the expansion of cements as well as we are setting up third wood and cement particle board plant. Those two projects are under execution.
Mangalam: Could you also tell us what kind of dilution that there will be on account of the issuance of these NCDs?
A: No dilution at all. See this is only a debt they are NCD, so it will remain as a debt only.
Reema: Could you tell us what will be the finance cost to the company in FY17? How much will you be paying by interest cost?
A: Interest cost is marginally higher about 2 percent, maybe close to 16 percent and its Rs 325 crore. The Rs 200 crore is actually meant for expansion.
Mangalam: You speak about expansion, so what kind of expansion will that be organic or inorganic and at the same time if you could tell us what the cement price strengths have been from the start of this year and at the same time in May?
A: Cement prices in the month of May are really encouraging. The prices have gone up because in March there was rush for volumes and slightly the prices got diluted, but in the month of May prices are good, the demand is good both in Andhra Pradesh and Telangana, so we are doing very well in cement. However, we already have two plant of wood and cement particle board and both the plant has reached full capacity utilisation, so now we are adding a third plant in the existing location that is the Simhapuri.
Mangalam: What’s your outlook on inorganic growth plant? Are you looking to acquire any other cement plant?
A: No, not at all.
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