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Flex Engg plans financial revamp

Ambarish Mukherjee

NEW DELHI, May 1

THE Delhi-based Flex group of industries is banking heavily on the financial institutions for restructuring the group engineering outfit -- Flex Engineering Ltd.

For this, the company has decided to go in for negotiated settlement of dues of financial institutions and worked out a two-pronged strategy of repaying some dues in quarterly instalments and some by transferring the shares of group companies held by it.

As a starter, ICICI Ltd, along with other financial institutions, will pick up 4.85 lakh shares of Flex Industries Ltd (FIL), currently held by Flex Engineering Ltd (FEL), at an average price of Rs 20.12 per share.

The detailed plan for such settlement include provisions for repayment of loans and non-convertible debentures to ICICI and other financial institutions in five equal quarterly instalments. The target is to complete payment by March next year.

Apart from clearing off a major portion of dues to the financial institutions, the company also proposes to convert the balance principal outstanding into zero rate loans.

At present, the company is burdened with a debenture liability of financial institutions to the tune of Rs 42.87 crore at zero rate of interest. The company intends to convert this existing zero rate debentures to zero rate loans.

Flex Engineering share price had been subjected to wild fluctuations during the past one year. Currently hovering around Rs 18, at one point of time, it had moved up to Rs 39.85 before plunging to a historical low of Rs 3.80.