JCT to repay convertible bond holder from sale of its non-core assets

JCT Ltd, one of India’s leading textile makers, plans to sell some of its noncore assets to repay holders of its foreign currency convertible bonds. The company’s non-core assets include 70 acres of land at Ganganagar in Rajasthan and two plots in Delhi. The combined market value of these land would be about Rs 80-90 crore.

The move comes after the Punjab and Haryana High Court last week dismissed a petition seeking winding up of JCT, filed by hedge fund QET that holds a majority of the Rs 115 crore of bonds outstanding.

The company was caught in the global meltdown in 2008, had defaulted to the bondholders in 2011.

Bolstered with the turnaround, the company has now decided to repay these bond holders either from internal cash flow or proceeds from the sale of non-core assets, Chairman and Managing Director Samir Thapar said.

In the first six months of this fiscal year, JCT posted a cash profit of Rs 16.37 crore as against a loss of Rs 13.43 crore a year earlier, while turnover rose to Rs 480 crore from Rs 452 crore. It expects revenue to total more than Rs 900 crore in the fiscal year ending on March 31, compared with a little over Rs 800 crore in the previous year. Since they are now out of the woods, they are making serious efforts to reduce their overall debt.

The assets of the company are more than its liabilities and it is expected that JCT will make all-out efforts to generate funds, either out of cash profits or by sale of non-core assets to pay off the balance bondholders or get the debt restructured to maintain its creditworthiness, the court observed. It asked the company to pay 25 percent of the amount due to current bondholders within six months and the rest thereafter

The company, in addition to the debt of Rs 115 crore to the bond holders, has borrowed Rs 330 crore from nationalised banks. The banks have restructured the loans under the corporate debt restructuring scheme in September 2012 and the company has not defaulted on that.

JCT Limited, one of the leading manufacturer of textiles and filament yarn, is the flagship company of Thapar Group. JCT makes textile from cotton, cotton blended and yarn dyed fabric and supply to defence, work wear and high-fashion segments. It now plans to expand to home furnishing.

JCT Limited was the first textile manufacturer in the country to introduce eco-friendly fabrics made of organic cotton and its textile division was the first in the industry to be accredited with an ISO 9001 certification in 1996.