Fri, Dec 9, 2016 | updated 07:03 PM IST

Aryanav Paper Mills gets 21 million low cost debt

Updated: Nov 09, 2016 11:46 IST

New Delhi [India], Nov 8 (ANI-NewsVoir): Aryanav Paper Mills Private Limited of India has entered into a long term financial association with Linetrust International Offshore Limited of the UK. Under this association the UK based firm will provide 21 million dollar as long term debt.

The Telangana based Aryanav Paper Mills is engaged in the business of manufacturing of Hi-BF Kraft Liner and Top White Liner in the state. The company will use the money to setup a 54,000 TPA Hi-BF Kraft Liner and Top White Liner manufacturing unit.

This was announced at a function to organize the Joint Association Ceremony at the Inter-Continental Mid Plaza Hotel, Jakarta, Indonesia. Director of Capitico PRG Pvt. Ltd., Dhruv Goel, who was presenting the association says, "This association can change the dynamics of the paper industry in India. Currently banks and financial institutions lend to corporate at around 11 and 12 percent p.a. With Linetrust providing long term debt at four percent max p.a. will have a huge impact on the bottom-line of the company.

This will help Aryanav Paper to leverage its strength by filling the vacuum created by the debt ridden paper manufacturing companies in India who have either reduced their production capacities due to increased raw material costs or have been forced to shut down operations due to dearth of cheap working capital."

Citing the example of Ballarpur Industries Limited, one of the largest makers of writing and printing papers in India, who have run into problems recently due to a heavy debt burden and are forced to sell its holding companies to raise capital, Goel says, "other companies too are facing similar problems. Low cost debt will definitely help companies to turn around."

According to "India Paper Industry Forecast and Opportunities, 2017" the paper industry in India is expected to grow at the CAGR of around 9.6 percent. This will make the revenues of paper industry of India to reach up to USD 11.83 Billion by 2017. About 70 percent of the total installed capacity of paper production in India is accounted by Gujarat, West Bengal, Orissa, Andhra Pradesh, Karnataka and Maharashtra.

Linetrust International in its statement has underlined the need for low cost debt for corporate to fight rising cost of recycle waste paper pulp, one of the raw material for manufacturing Kraft Liner paper. With affordable debt under four percent p.a. to corporate, Linetrust will help create a major impact on the top-line and bottom line of companies.

The Linetrust Group, whose ASEAN office is in Jakarta, Indonesia, has been in the business of lending in the traditional brick and mortar sectors has now seamlessly aligned its business strategies to adopt to the new age technology financing viz. bio-technology, e-commerce and other information technology related business verticals. The trade finance business of the firm finances cross border transactions. It's a form of working capital.

The group has decided to open a close ended fund to the tune of USD 600 million to exclusively cater to the ASEAN markets with prime emphasis on the Indonesian Markets, shareholder Manoj Todi said. "Sailesh Hiranandani , another shareholder handling ASEAN debt fund market has been of the opinion that all these will help improve the manufacturing sectors which are fighting increasing interest costs and rising raw material prices affecting the domestic industries."

Amit Gupta, Director, Aryanav Paper Mills opines "This association with Linetrust will help us to create a venture which will be useful in creating the best Liner Papers in the market. With the cost of debt coming down drastically, it will have a direct bearing on our top line and bottom line thus enabling us to compete healthily vis-a-vis our peers who have been battling rising raw material costs and high interest debt burden." Gupta expressed his immense happiness and thanked Linetrust in placing its faith in a green-field venture and help realize his dreams. (ANI-NewsVoir)