Kohinoor Foods Limited , a prominent player in the food products industry, has released its unaudited financial results for the quarter ended September 30, revealing ongoing financial challenges and efforts to restructure its debt.

Financial Performance

The company's standalone financial results show a continued struggle with profitability. Specific revenue and profit figures for the quarter are not provided in the available data.

Debt Restructuring and One-Time Settlement

Kohinoor Foods has entered into a One-Time Settlement (OTS) agreement with its consortium of lenders. As per the terms of the revised OTS:

• The company was required to pay a total of Rs. 227.45 crores.
• To date, Kohinoor Foods has deposited Rs. 205.00 crores with the banks.
• An outstanding amount of Rs. 40.11 crores to PNB-Dubai and Rs. 13.21 crores to PNB remains under consideration for settlement.

The company has requested an extension until December 30 for the payment of the balance amount. However, two member banks among the consortium lenders have expressed their inability to comply with this request, citing non-compliance with the original settlement terms.

Asset Demonetization

As part of its debt restructuring efforts, Kohinoor Foods has:

• Proposed to demonetize its rice manufacturing unit.
• Received a full consideration amount of Rs. 190.00 crores from a buyer for this unit.
• Handed over possession of the unit to the buyer, although the sale deed is still pending.

The company plans to continue its rice manufacturing operations on a lease basis at Kandla, Gujarat, to sustain its business operations.

Legal Proceedings

Kohinoor Foods is currently facing several legal challenges:

• The Debt Recovery Tribunal (DRT) Delhi has passed an order directing the company to pay Rs. 926.13 crores to its banks.
• Secured creditors have filed petitions under Section 7 of the Insolvency and Bankruptcy Code, 2016, which are yet to be admitted by the NCLT, Chandigarh Bench.
• The company is contesting various attachment orders and execution petitions filed by vendors and creditors.

Interest Provisions

The company has not provided for interest on bank loans classified as non-performing assets (NPAs):

• Unprovided interest amounts to Rs. 3,723.80 lacs for the quarter.
• Cumulative unprovided interest stands at Rs. 80,595.02 lacs from the date the loans were classified as NPAs.

Additionally, interest related to a revoked corporate guarantee for a U.S. subsidiary has not been provided, amounting to Rs. 78.85 lacs for the quarter and Rs. 1,363.04 lacs cumulatively.

Going Concern Assessment

Despite these challenges, the management assesses that Kohinoor Foods continues to be a going concern. This assessment is based on:

• The sanction of the revised One-Time Settlement by the lead bank.
• Interest shown by potential buyers for the company's assets.
• Provision of interest on the OTS amount, totaling Rs. 590.82 lacs up to September.

Conclusion

Kohinoor Foods Limited continues to navigate a complex financial landscape, balancing debt restructuring efforts with ongoing legal challenges. The company's ability to complete its one-time settlement with lenders and successfully restructure its operations will be crucial for its future stability and growth prospects.

Investors and stakeholders will be closely watching the company's progress in resolving its financial obligations and legal issues in the coming months.

Kohinoor Foods Limited , a prominent player in the food industry, finds itself in a complex financial situation following a recent order from the Debt Recovery Tribunal-III, Delhi. The company has been directed to pay a substantial sum to its consortium of lenders, while simultaneously navigating the intricacies of an ongoing one-time settlement (OTS) agreement.

DRT Order and Financial Obligations

The Debt Recovery Tribunal-III, Delhi, has issued an order directing Kohinoor Foods to pay INR 926.13 crores to its consortium of banks within 30 days. This order was uploaded on the DRT website, marking a significant development in the company's financial landscape.

One-Time Settlement Agreement

Prior to the DRT order, Kohinoor Foods had entered into a one-time settlement agreement with its lenders. As part of this agreement:

Current Challenges

The company now faces several challenges in managing its financial obligations:

1. DRT Order Contestation: Kohinoor Foods is in the process of contesting the DRT order with the competent authority, tribunal, or court.

2. Extension Request: The company has requested all member banks to extend the payment period for the balance amount under the OTS agreement.

3. Lender Disagreement: Two member banks among the consortium lenders have communicated their inability to proceed, citing non-compliance with the terms of the one-time settlement.

Impact on Operations

Kohinoor Foods has acknowledged that the DRT order and the ongoing settlement negotiations have material implications for its financial and operational activities. The company is actively working to resolve these issues and maintain its business continuity.

Looking Ahead

As Kohinoor Foods navigates these financial challenges, stakeholders will be closely watching how the company manages its debt obligations and maintains its operational stability. The resolution of this situation could have significant implications for the company's future in the competitive food industry landscape.

Investors and market observers are advised to keep a close eye on further developments regarding Kohinoor Foods' financial restructuring efforts and the outcome of its contestation of the DRT order.