Tilaknagar Industries prepays Rs 54 crore debt to Edelweiss under restructuring pact; shares dip

Tilaknagar Industries Ltd (TIL) on Monday, March 20, said it has prepaid Rs 54 crore to Edelweiss Asset Reconstruction Company (EARC) towards principal along with accrued interest. The spirits maker focuses on becoming near net debt-free in the next 12-18 months, said its Chairman and Managing Director Amit Dahanukar.

TIL, a leading manufacturer of Indian-Made Foreign Liquor (IMFL) had gone through a debt restructuring exercise in February 2020.

"Consequent to the above prepayment and as per the terms of the Master Restructuring Agreement (MRA), a debt waiver of Rs 126.63 crore has been given by EARC and the same shall be written back by the company," the company said.

TIL entered into an MRA on February 6, 2020 with EARC. As part of that, its total debt owed to banks and financial institutions was Rs 523.32 crore and it was restructured at Rs 344.47 crore with a balanced debt of Rs 178.85 crore.

"The company has been regularly paying the stipulated principal and interest to all the three EARC trusts from 2020 onwards till date in accordance with the repayment schedule of MRA," it said.

As per the terms of restructuring by EARC, the balance debt shall remain outstanding till the time the restructured debt is repaid. The balance debt along with accrued interest shall be waived by EARC once the restructured debt has been repaid.

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Accordingly, the total existing debt of EARC now stands reduced to Rs 201.09 crore.

"Our debt-reduction strategy is on track. We have reduced the debt from a peak of Rs 1,199 crore as of March 2019 to Rs 323 crore as of December 2022. This prepayment of Rs 54 crore to EARC will further decrease our liability and pare finance costs. Our focus is to become near net debt-free in the next 12-18 months,” Dahanukar said.

In the quarter ended December 2022, TIL delivered its highest-ever quarterly net revenue at Rs 303 crore.

Shares of Tilaknagar Industries Ltd dropped 2.5 per cent, quoting at Rs 104.30 on NSE. The stock has given more than 43 per cent return in the last one year.

With inputs from agencies