Orchid Chemicals seems to be in a bad situation. K Raghavendra Rao, managing director, Orchid Chemicals & Pharmaceuticals is concerned that raising equity might be difficult at this point.
In an interview to CNBC-TV18, he said that the only option left is to replace debt with another debt itself. The company’s total debt including foreign currency convertible bonds (FCCBs) stands at Rs 1,600 crore.
“The debt-equity ratio is not going to change when you replace debt with debt because you will raise debt to repay FCCB so ultimately debt-equity ratio is not going to go beyond 1:5,” he explained.
The company is planning to raise funds primarily to repay the FCCBs due in February 2012, and the balance amount to be used to repay debt and pursue organic and inorganic opportunities
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