Logistics firm Gati Ltd is looking to restructure debt worth over Rs 300 crore in a corporate debt restructuring (CDR) process, atleast two sources familiar with the development told VCCircle. Debt resolution firm Brescon Corporate Advisors, is advising the publicly listed express logistics company on the CDR exercise, sources add.
Gati spokesperson replied that the company has no such plans of looking at a CDR. “There has been no such thought nor has there been any such plan that has been put together nor has the company approached any banks/lenders for the debt restructuring.”
The spokesperson added that Gati Limited has a strong balance sheet and has sufficient resources to meet its liabilities as and when the same are due. The firm also referred to successfully refinancing its FCCB obligation through Goldman Sachs recently.
The firm had earlier announced its restructuring plan of capital infusion including bringing in a strategic/business partner grow the business.
The share price of Gati closed at Rs 31.3 on Monday, down 3.69 per cent on BSE in a weak Mumbai market. The company currently has a market capitalisation of Rs 271.06 crore.
Its shareholders include private equity firm Infrastructure Fund of India, which has a 7.84 per cent stake.
In December, Gati raised $22.18 million through a fresh issue of FCCBs to refinance the existing foreign currency convertible bonds (FCCBs) aggregating to $22 million due for redemption on December 6,
2011.
Gati has been in the market for quite some time to sell off its cargo business. KPMG is said to be advising the company on the sale process.Earlier reports had suggested that the firm will sell its shipping arm Gati Coast. Last year the firm demerged its shipping business to its wholly owned subsidiary Gati Ship, where the management has said that it plans to bring in a strategic investor. It was also said to be in talks with private equity major Apollo Management for a $100 million infusion.
For the quarter ending September 2011, the company reported a total income of Rs 236.4 crore and a profit before tax of Rs 6.9 crore. The core business, express distribution and supply chain division,
posted a growth of 15.3 per cent to Rs 228 crore from thecorresponding quarter in the previous year with PBT at Rs 16.3 crore.
The shipping business of the company has a negative growth of 71 per cent during the quarter impacting the performance of the core business adversely by Rs 9.38 crore.
Gati, founded in 1989, has more than 3500 employees covering 622 out of 626 districts in India. Gati has over 4500 vehicles on the road not including its fleet of refrigerated vehicles, container shipping
vessels and world class warehousing facilities across India. It has offices in Singapore, Beijing, Shanghai, Qingdao, Hong Kong, Bangkok, Kuala Lumpur and Dubai apart from SAARC countries that concentrate on India- centric distribution solutions.
Last year Hyderabad-based Amrit Jal Venture Ltd, the holding company of arm, raised Rs 30 crore from IFCI Venture Capital.
