New Delhi-based Kanoria Chemicals and Industries Ltd (KCIL) is in advanced talks to raise close to Rs300 crore from Piramal Fund Management Pvt. Ltd to refinance a part of its debt, two people aware of the development said.
The investment will be a structured debt transaction through which Kanoria Chemicals will refinance a large portion of loans taken by its subsidiaries, the people said on condition of anonymity.
A Piramal group spokesperson declined to comment. An email sent to KCIL had not elicited a response until press time.
According to a recent report by CARE Ratings, Kanoria Chemicals had invested Rs173.7 crore in its subsidiaries (in the form of investment and loans and advances) as of fiscal year 2016, accounting for 34.5% of its net worth.
KCIL has also extended corporate guarantee to the tune of Rs.162.1 crore for loans taken by its subsidiaries, especially Kanoria Africa Textile Plc. Ethiopia (KAT), which began commercial operations in April last year.
Kanoria Africa Textiles was set up as a new project with an initial investment of around $30 million to produce denim and caters to customers in the US, Canada and the European Union.
KCIL is the flagship company of the S. S. Kanoria faction of the Kolkata-based Kanoria family. The company has two plants—one producing alcohol and alcohol-based intermediates at Ankleshwar in Gujarat and another producing formaldehyde and hexamine at Visakhapatnam in Andhra Pradesh. Apart from chemicals, KCIL has business interests in automotive and industrial electronics, renewable energy and textiles.
