Kiri Industries Ltd
NSE:KIRIINDUS
Kiri Industries Ltd
NSE:KIRIINDUS
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Ladies and gentlemen, good day, and welcome to the Q3 and 9 Months FY '24 Earnings Conference Call of Kiri Industries Limited. [Operator Instructions] Please note that this conference is being recorded. At this time, I would like to hand the conference over to Mr. Parvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Good evening, everyone, and a warm welcome to all. My name is Parvangi Jain from Valorem Advisors. We represent the Investor Relations of Kiri Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the third quarter and 9 months ended of the financial year 2024.
Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review.
I would like to now introduce you to the management participating with us in the conference call. We have with us Mr. Manish Kiri, Chairman and Managing Director; Mr. Jayesh Hirani, Senior Manager, Accounts and Finance; and Mr. Suresh Gondalia, Company Secretary. I now request Mr. Manish Kiri to give us his opening remarks. Thank you, and over to you, sir.
Good evening, everybody, and welcome to the earnings conference call for the third quarter and 9 months ended financial year 2024. I hope you are all keeping well and safe.
Let me first brief you on the financial performance of the third quarter and 9 months ended financial year 2024, followed by the operational highlights. On a stand-alone basis during quarter 3 FY '24, Kiri attains sales revenue of INR 141 crores, which grew by 6% year-on-year basis, and incurred an EBITDA loss of..
Hello, sir. Sir, we lost your audio in between.
Can you hear me now?
Yes, I can. Please go ahead.
Coming to 9 months ended numbers, the company attained stand-alone sales revenue of INR 434 crores, lower by approximately 3% year-on-year basis and EBITDA loss of INR 53 crores against EBITDA loss of INR 94 crores in the same period of the last financial year. Net loss was INR 64 crores versus net loss of INR 108 crores in the same period of the last financial year.
So there is a significant improvement from last year to the current year for the first 9 months. On a consolidated basis, quarter 3 FY '24 revenue stood at INR 219 crores, which grew by 7% year-on-year basis, an EBITDA loss of INR 13 crores. Net loss for the quarter was about INR 49 crores on a consolidated basis. Coming to 9 months and in numbers. The company...
Sir, we lost your audio. Can you hear me? Ladies and gentlemen, we have the line for the management reconnected. Sir, please go ahead.
Sorry, there was some technical glitch while I was going through the consolidated numbers. Let me go through again. On a consolidated basis, quarter 3 FY '24 revenue stood at INR 219 crores, which grew by about 7% year-on-year basis with an EBITDA loss of around INR 13 crores. Net loss for the quarter was about INR 29 crores on a consolidated basis. Coming to 9 months ended numbers, the company attains consolidated sales revenue of INR 677 crores, lower by about 6.4% year-on-year basis and EBITDA loss of INR 21 crores against EBITDA loss of INR 33 crores in the same period of the last financial year. Net loss was INR 72 crores versus net loss of INR 87 crores in the same period of the last financial year.
On the operational front, in consolidated statements, the share of profit of associates, which includes the share of profit of DyStar, which does not have any impact on the valuation of the stake of Kiri and DyStar. That's the reason when I briefly on the consolidated net profit, I didn't include DyStar in presenting you. The value of the Kiri stake in the DyStar is $603.8 million, determined by SICC, vide its judgment dated 3rd March 2023.
The major reason for negative EBITDA was higher legal costs, lower capacity utilization with conversion costs not getting fully absorbed and most importantly, not being able to pass on to the cost increases to the finished product sales prices, which again has been because of the sluggish demand. On a stand-alone basis, EBITDA margin is negative in quarter 3 on account of sluggish demand, flat material margins contributing increasing higher legal cost. The financial performance has remained sensitive to dynamic global markets and industry has been facing challenging times for quite some time. Industry experts are hopeful of rebound during the current calendar year with positive outlook for the textile industry and expectations of stable crude prices.
During the reporting quarter, the company received interim dividend of INR 8.2 crores from the joint venture company, Lonsen Kiri Chemical Industries Limited. The hearing for the Alternate Relief Application, which was essentially the consequential order application was held on January 24, 2024 and January 25, 2024 last month at Singapore International Commercial Court to give an effect to the order of the court, made in SIC4 dated 3rd July 2018, which ordered Senda International Capital Limited to purchase Kiri's Industries Limited 37.57% shareholding in DyStar Global Holdings Private Limited based on the valuation, which has been adjusted at $603.8 million, which is a final purchase price by Singapore International Commercial Court in the judgment dated 3rd March 2023.
This was the enforcement hearing. And after the enforcement hearing the parties, the court reserved its judgment and will issue judgment as soon as it is available. In case of examination of judgment debtors for recovery of cost by SICC and Singapore Supreme Court to the company, hearing for examination of Mr. Ruan Weixiang and Ms. Fan Jing is fixed by court on 9th July 2024. With that, I would like to now open the floor for any questions. Thank you.
[Operator Instructions] We take our first question from the line of Kalpesh from KIFS Capital.
I want to know what rippling DyStar stake stream and how much it will take undergo for recovery amount in the 24th and 25th January? Is there is some direction from Supreme Court?
Supreme Court completed the enforcement hearing. And now decisions from the court and order is awaited. Just to give you little more highlights, the arguments took place on 5 broader issues, the 5 broader points that Kiri has included in the previous -- in its application. First one was to sell DyStar, to put DyStar for an auction. And by selling DyStar, use the proceeds of the fund to comply with the legal order. Number two, appoint receiver to sell the company, to sell DyStar. Number three, Kiri should be getting its $604 million -- $603.8 million plus unpaid legal costs and plus interest. If interest is awarded by the court, then number four, the interest cost.
So there were arguments heard by the court from all sites to award interest to Kiri. And Kiri had demanded interest from 3rd April 2024, which we considered one month statutory period for the recovery of the execution of the orders from 3rd July 2024. And number five, to transfer part of the excess cash to Kiri. The discussions and the deliberations took place between $100 million, which was the amount, Senda prepared to declare as a dividend as an excess cash to $282 million, which Kiri demanded showing the excess cash in DyStar to the extent of $282 million. So these are the broad 5 players on which arguments have taken place.
We don't know exactly when the judgment would come. We are expecting the decision on these 5 points should come sooner rather than later. And we are expecting an oral judgment or a summary judgment in a short time, in a week's time, which may be followed by the written judgment explaining the grounds of decision. Again, this is expectation from Kiri based on what transpired. But the judgment can come anywhere from one month to 4 months as we have seen in the past. So let's see when and how fast the judgment comes.
The next question is from the line of Bhavesh Chouhan from IDBI Capital.
Sir, we have recently incorporated a subsidiary in Singapore. I would like to know what was the purpose for the same?
I think the purpose for the subsidiary was the multiple because there was not any Singapore company that Kiri had. And now we are approaching towards finality of this long litigation. And we are expecting funds to come as soon as court starts the recovery process post this enforcement hearing. We are preparing a subsidiary there, which may be useful either for the receipt of the funds or for the use of the funds and also for future investment activities...
Hello. Sir, can you hear us?
I can hear you. Can you hear me?
We lost you in between. Yes, please go ahead.
Right. Sorry. So the subsidiary is being formed for various objectives, for the investment, for the future funds, for the receipt of the funds, for also the activities that we may want to do on investment side in future from Singapore. So that's the reason that the subsidiary has been formed there.
Okay. And sir, now that we are nearing the final -- as you say that nearing the completion of the case, is it likely that our legal cost will no longer exist after maybe a quarter or so?
Yes. The legal costs...
Hello. Fellow management, sir, can you hear me? Sir, just allow me a moment, I will just check.
Maybe there are problems in your line. I don't know what is happening, but I am able to hear. Since the participants are not able to hear me.
Sir, we are losing the audio in between sir. You may go ahead, sir. We can hear you now.
You can hear me now? Is it clear?
Yes, sir. Loud and clear. Please go ahead.
Yes. As you very rightly mentioned that after a quarter or so, the legal costs, which is being incurred right now will substantially reduce.
The next question from the line of Mr. Burramsetty Suresh from Burram Financial Services.
Suresh from [indiscernible] sir. Remember me, I'm last [indiscernible] already participated...
Remember. Yes, You participate and you -- I perfectly remember you.
Actually, January 24, some case judgment in last conference call you told. But judgment is not received sir, January 24?
January 24 to 26 was the hearing, before the oral hearing during which the arguments have taken place, okay? So all parties made their oral arguments and oral submissions on 24 to 26, which actually lasted only for 2 days, 24 and 25. 26 was not there because it got concluded on 25th evening. So.[Technical Difficulty]
Suresh sir, can you hear me.
I can hear you. Can you hear me?
I can hear you loud and clear. Suresh sir, can you hear us?
Madam, I was hear me madam, but no audio.
Can you hear the management line?
I can hear you, but maybe my voice is not clear.
I can hear you loud and clear. I think Burram sir has some issues with the audio.
Present hear you. Present voice is clear, management also.
Management sir, please go ahead.
Right. So what I was mentioning is that 24 and 25 was the enforcement hearing. And during these 2 days, the enforcement oral arguments got concluded. The judgment was reserved and we are now waiting for the decision from the court. So as soon as the decision is obtained, as soon as the decision is announced on all 5 points, which I mentioned earlier, will immediately disclose, will immediately inform all of you.
How much time takes it, reserved judgment is coming?
I think somewhere between 1 month to 4 months that is what we are expecting currently. I hope it comes earlier. So starting from maybe March to June, July, any day it can come.
Overall judgment is weekly you earlier mentioned. Overall judgment will come week -- 1 or 2.
Yes, if court decides to give oral judgment, which is like a summary judgment of a short judgment, before giving the detailed grounds of decisions, then it can come in a few weeks' time. If court decides to do so, which was our request to the court. So if that request is accepted, if court considers that request, then in the next 2, 3 weeks time, we can expect judgment can come from the court?
Sir, in the front of the DyStar, actually, is no debit in the company. Any debits in the company?
Sorry, I don't understand your question. What is in the company?
Actually, DyStar, in the front of DyStar is cash reserves is there in the company?
Yes, huge cash in the company. As per the submission in 2023, by DyStar, there was $446 million of cash in the company, which was submitted in a sworn in affidavit by the CFO of the company. It had almost about $600 million of net current asset, and it's close to $1.2 billion of retail earnings without any borrowings or loans. So there's a huge reserve in the company, and there is quite a lot of cash. And now financial year 2023 ended for DyStar, the more cash has been added as we speak. So by end of this quarter, cash would be even higher.
Sir, actually, you can ask the court if the huge cash is available in DyStar. You have asked the money is stopped -- actually, he's not clear that you can ask the cash reserves in Kiri side also, pay the [indiscernible]. You can understand sir I know a little bit in this. Actually, you can submit the court cash reserves is there. You can...
Court is aware. Court has all the details of DyStar. Court is very well aware of how much is cash, what are the DyStar numbers, all are in the court's submissions. And that is why court is deliberating and court has heard the arguments from Kiri as well as from them to make partial payments to transfer part of excess cash of DyStar to Kiri.
That is before the court to decide, which is already there in the submission, which was there in the oral arguments and it is now up to court to decide that number and to decide whether to give the order to transfer part of that the cash to pay. So all these decisions will come in the order.
As there is no response from the current questionnaire, we move on to the next question from the line of Mr. V.P. Rajesh from Banyan Capital.
Manishji, congratulations on the improving financial results in this quarter and it looks like we have hit the bottom. So I was just curious, do you think in financial '25, fiscal year '25 we could expect profitable company in terms of EBITDA on a standalone basis?
Yes, absolutely. Even I am expecting this quarter January to March to be EBITDA positive. And of course, year 2024, '25 to be profitable. Even in this quarter, enough emphasis has been put on to ensure that we turn into cash positive and EBITDA positive in the coming quarters.
Great. My next question was, what is our net debt situation at the end of the quarter, December quarter?
At the end of the quarter, net cash we are running actually as the negative, right? So that is the reason if you study the working capital cycle, all the payables and some of the extensions on the number of days payable, which you would see, right? So good thing is that we have got some relaxation on time lines for the payment to the legal counsel because of there has been many years till now. So there is some relaxation in terms of the credit that we are able to get from the Singapore Council, to that extent, it helps us from cash point of view and not from the profit point of view.
Understood. I was just trying to understand, of course, the debt outstanding on our balance sheet at the end?
Debt outstanding?
Yes.
Debt outstanding is INR 115 crores, 1-1-5.
And I assume we don't have much cash against that, right? Most of the cash must be...
We have not much cash against that. Correct. I mean not much cash against that, correct. But INR 115 crores is the debt outstanding, which is borrowing on the company as on today.
Right. And my next question was on the dividend side. You mentioned that the joint venture paid us some dividends. So that was kind of a surprise. So can you just elaborate as to what happened? Why did they decide now to pay that INR 8 crores plus amount?
Just to give you brief highlights. There were also a kind of a lot of arguments went on with -- at the Board level at Lonsen Kiri also because Kiri has been pressing hard and trying to convince the other side, which is the same shareholder who is at DyStar to achieve the dividend from Lonsen Kiri. And there are no new CapEx, there is lot a pile of cash at Lonsen Kiri. No new projects that has been expected, also 0 debt company. And it is more than justifiable to give dividends. So the total dividend declared and considered by the majority of the Board was INR 20 crores.
In fact, our demand was more than INR 100 crore dividend to be declared, right? Because the cash there is more than INR 300 crores, right? So it was very much justifying but denying it is request -- you can imagine that the same shareholder and the same majority directors are sitting at Lonsen Kiri. And I think by compulsion or maybe just to show a good grade, they declare a very small tiny dividend there compared to retained earnings and the cash that we have at Lonsen Kiri.
Understood. And then on the court case, we won the lawsuit last year. And my understanding was that the process will move very fast to recover that money from DyStar or the JV partner rather. Why has it taken so long to get to the court to come to this particular hearing that you just talked about last month. And why it did take so long for them to then come out and then how long will it take further from there to get it implemented?
So let me just explain you the rationale and the process that we went through since March 2023, since we got the final decree, the final order. Now you can understand that the court as well as Kiri we both can expect that the Senda, the defendant would honor the court order, correct? So that was the assumption having cash at Longsheng level, having cash at DyStar level, correct? The general expectations and hopefulness from all sides, that Senda would in fact honor the court order. And there were no evidences which were accepted by the court or presented by Senda that they would not have financial means to honor the order because you can see that the Longsheng, they are a public company sitting on $1.4 billion of cash, while DyStar is sitting $500 million of cash.
Looking at those cash positions with the other side, it was not actually imaginable that they would not honor the order. So we believe that it was a willful and intentional dishonoring of the order, let me put it this way. So from March onwards, when we realized by June, July, that on the other side not enough efforts are being made, Senda is trying to drag their feet, not giving us convincing answer. We approached the court in July, August 2023. [indiscernible] court that see this guy, we don't believe, we don't trust that would honor the order. So we need to have enforcement on the order, okay? So enforcement proceedings in fact, started from August 2023. So court said that fair enough. We understand Kiri's position. And court actually granted us [indiscernible] to file the enforcement documents, to file the alternate relief application, which Kiri did in 2023, August.
Then court set a time line, okay? Court set a time line for them to file a response, for us to file rebuttal, for the dates for expert opinions to be filed, dates from our side for the expert opinion to be filed. Then the skeletal arguments to be filed, legal submissions to be filed. I mean the closing submissions to be filed and the hearing to be done on this enforcement trial. So that went from August till January, which all 3 decided dates. And let me tell you this, Singapore court didn't change the hearing date at all. What they decided from August till January to be completed within 5 months, they did it, okay?
There were attempts made in between to delay the process, court didn't do it. Court sticked to the date which they had given and they completed the enforcement hearing. So from August till January was the court process to start enforcement and to start recovery by giving the enforcement orders. So we are now at a stage where the hearing got completed. We are waiting the enforcement orders to start the recovery process.
That's very helpful, Manishji. But my question is even if the enforcement order comes about, as you said, in 1 to 4 months, then what will be the path forward to actually get money in your bank account?
So let us say first -- the first expectation from our side would be to get a partial cash from DyStar to Kiri. So somewhere in the range from $100 million to $200 million, whatever court decides as an amount to be given to Kiri immediately to relieve Kiri from its financial hardship and to have some kind of justice and relief given to Kiri by transfer of partial excess cash to Kiri. So if that happens, that would be the first one as soon as the order is out, if that happens, correct? So that's the first tranche of money that Kiri is expecting right?
Now after that, when the company is sold, when the receiver is appointed, receiver will start the process. And two names of receiver from Kiri have gone in as a recommendation. Two names of the receiver from Senda have also gone into court as a recommendation. So court can decide one of these 4 candidates as the receiver to sell the company or court has discretion to appoint a fifth one from the list of the court approved receivers, liquidators or administrators, whoever you say. So once court appoint a receiver, based on the current time lines and the average time line indicated by the receiver is from 9 months to 12 months.
I'm sorry to interrupt you, Mr. Rajesh. May we request you to join the question queue sir, as we have several participants waiting for the turn.
[Operator Instructions] The next question is from the line of Amarchand Goel, an Individual Investor.
And I can see there's a light at the end of the tunnel. There are -- I want to figure out what is their -- Senda's argument in the court? Like what are their points that they are keeping stick to? And what are their arguments are? And -- so would you throw some light where they're coming from the arguments are?
Sure. Senda's argument were such that they said that they don't have money. They have money at Longsheng level. They have money at DyStar level. But Senda, which is a holding company doesn't have cash. It try to raise some cash. Banks didn't give money to Senda. And that is the reason that they have been not able to comply with the legal order. Correct? So then the only option left to sell the company. Their argument that the sell process is to be handled by the investment banker or the adviser, and the sell process is to be handled and controlled by DyStar Board.
Kiri's arguments that the cell process is to be controlled, managed and run by the receiver. So then only the sell process of DyStar can be transparent, efficient and can be under the control of the court right, not under the control of DyStar Board. So that was Kiri's argument against it. Kiri argued in the court that we should get full $604 million plus legal cost plus interest if interest is awarded from the sales proceeds of DyStar. And then whatever left is to be given to debt.
They argued that the sell proceeds to be divided in the ratio of 40:60 in the ratio of the shareholdings of both the shareholders. That was their argument. Kiri argued that the interest is to be awarded to Kiri. They argued that interest is not to be awarded to Kiri, okay? Kiri argued that Kiri must get some injection of funds in the form of immediate relief by transferring excess cash of DyStar to Kiri, part of excess cash to Kiri. In that -- for that purpose, I think Senda was also okay to pass on to Kiri, and there was differences in the amount, okay? Kiri argued that the excess cash in DyStar is $282 million. DyStar argued that the cash in -- excess cash in DyStar is $139 million that can be punched out of DyStar. And Senda's argument was that $100 million is an excess cash in DyStar, which can be dividended off, correct? So the common number, which all 3 parties were in line or were in agreement with $100 million excess cash in DyStar minimum. That was...
So we should be able to get at least $100 million in the next few weeks once the final...
That's the expectation that one number, which is common number, in agreement all 3 parties, at least that number should be given to Kiri to relieve Kiri from its financial hardship almost more than 9 years Kiri has been fighting this legal case.
Are we going to get the other legal cost, the one we won INR 50 crores that they didn't honor last time.
Yes, it is what we are going to get, which would be added to our receivable to what we receive from the sale proceeds. And not only that, we are going to get that with interest because interest is already running on the legal cost. Interest has already been awarded on the legal cost. So the number which was SGD 8.11 million, according to our calculation, which is now must be SGD 10 million plus.
Right. And we should get that alongside with 100 million that the first tranche that we get...
Yes. So let us say let us say, of a number of 604 million plus legal cost, I'm giving you the rough estimation $10 million to 615. And if interest is awarded, another 40 million, 50 million interest. So if the number is 670 million, let's say, as a total receivables, which Kiri has from Senda then if we have given any excess cash transfer in between 100 million, then 100 would be deducted from 670. You see what I mean? Then our receivable would be 570. So whatever is our total number, whatever amount Kiri is receiving would be deducted from that. And interest naturally should not be applicable on that amount from the debt it is received to Kiri.
Interest from 2018...
I'm sorry to interrupt Mr. Goel, maybe request you to join the question queue?
That interest will be from April 2023, which is one post the final adjustment. So Kiri demand and the arguments were made by Kiri to award interest from April 2023, let's say, about for a year till April 2022.
[Operator Instructions] The next question is from the line of Manoj Bhura from Adinath Financial Services Private Limited.
[Foreign Language] one thing is sure, the other party is not willing to pay. Am I right, sir?
You are right, other party doesn't have intention to pay. It is not that [indiscernible] ability to pay. They have ability to pay. And the financials of other parties clearly indicates that there is definitely ability to pay, but there is no intention to pay. You're right.
Yes, it means now it is more or less decided that the company will go for auction.
Absolutely. I'm pretty sure that, that is the decision...
That is the decision it will -- because the other party is not willing to pay. They have already suggested the name of liquidators or those persons. It means they are the ready to follow [indiscernible].
And there is no point in waiting. Evidences do not suggest that by giving more time, they would be able to comply the orders.
In terms of what is the current valuation of DyStar?
Whatever is the current valuation of DyStar?
No. What is your estimate of the current valuation of DyStar, at what price can DyStar be sold?
If you -- I mean DyStar, if you look at the -- even the last years 2022...
My question related because if the valuation, say, if our shareholding is 38%, if the valuation which it can fetch in the market is more than $615 million then we will be getting more than that, or if it is less, will we be getting less than that?
No, no, no, -- let me be very clear with you, DyStar's value today, whatever it is, it is sold at $2 billion or if it is sold at $1 billion or if it is sold at $3 billion. Whatever value DyStar can be sold at, kiri is only entitled to receive $604 million plus [indiscernible] cost plus interest if interest is awarded. That is the only thing Kiri can receive irrespective of what the DyStar value because...
Even if the value of receipt is less -- if the value received is, say, $1 billion, right? Then also, we will be getting that number.
Yes, we will be getting that number because that is the number -- that is the crystallized liability. That is the number which is to be paid to us irrespective of DyStar value today, our number is based on the DyStar value of 2018, July 2018.
Agreed sir, but the other party is also requested to the court that the sales proceed be distributed in the ratio of shareholding.
Exactly. So this is our side of the argument. And their side of the argument is the proportionate. So the order will have this decision from the court. So when we receive the order from the court, it would be clear who would get how much. Whether we are right or they are right. It would be written in the judgment when the order comes.
Then my understanding is that at least minimum $100 million we will be receiving as soon as the court order is out. At least $100 million, which can go up to $260 million, which was our request, right?
$282 million.
$282 million which was our request. It will be in between $100 million to $282 million.
Yes, correct.
And the balance on the -- out of the sale proceeds, which will take 9 to 12 months.
That is right. That is right.
What is the probability of getting $282 million?
Well, $282 million probability is less, $100 million probability is very high.
$100 million probability is almost sure or very high. Is this probability or it is a certainty?
]
No, it's very high probability. I cannot predict the judgment. I cannot forecast the judgment before court takes a decision.
No, no, because you've told everybody is in the agreement on that number.
Yes. So everyone is agree on that number. So at least that number is extremely high probability for court to decide.
That should come if the court passes the judgment to say within February, then can we get in this financial year that amount?
Yes. That is what our target is...
Because that amount is absolutely ready.
Correct. Correct. Correct. So if court decides let us say, by end of Feb or beginning of March, our aim and the target is to have at least this amount before -- that amount before the end of financial year.
[Foreign Language] If the valuation is mouthwatering DyStar valuation, can we go for the acquisition of DyStar?
No, no, no, we are -- this is not our objective. Our objective is to get the funds, whatever due to us, we take.
The next question is from the line of [ Debanshu Katri ] from [ Katri ] & Company.
Congratulations on improved set of numbers. I have couple of questions. So just a couple of questions on the execution proceedings when the judgment comes out. Is this as per Singaporean law the final judgment? Or is this an appealable judgment because they don't intend to pay. So they may want to drag on by further appealing against this. So does it attain finality upon the judgment coming?
Let me -- that's a very good question what you have asked and very relevant question. This is the enforcement judgment. And this enforcement judgment can be appealable judgment but enforcement judgment in Singapore history is not the judgment that can be stayed. There is no precedence that such judgment is stayed even though appeal is made, correct? So that means the execution of the judgment will be instant and immediate irrespective of the right to appeal by the other party.
Okay. That's great to know, sir. And the second question is, sir, that right -- sir, the second question is, you mentioned about the Singapore unit being created for this purpose. Is the court aware of this? Or will something like this be encompassed in the judgment because technically, this will be a separate legal entity. So...
It has nothing to do with the court right? Whatever funds we receive in Singapore through the proceeds of DyStar sale or even before that, within 90 days, that fund will come to India to comply with our regulation, correct?
Right, right, right.
And once it comes to India, then with RBI's permissions, it would be then transferred for the investment purpose, for business operation purpose to Kiri subsidiary, but first, it has to hit India.
Yes, absolutely.
The next question is from the line of Ashwani, an Individual Investor.
Yes. So as you said that Senda has also given names to appoint a receiver, then should it be assumed that they are also willing to let DyStar go into liquidation. I mean, because DyStar is having $100 million of average PAT. Why are they allowing it to go into liquidation only because they are not willing to pay $600 million? I mean -- this doesn't meet...
It's a crazy -- I -- it's not what your question is a correct question. It is nonsensical. It is not understandable that if the cash in the company is almost $500 million plus increasing, why they want this company to go under auction. By the way, it is not a liquidation. It is en bloc sales by receiver, okay? So it is sale of the company as a going concern because it's not a illiquid company. It's not insolvent company. It's a solvent company, profit-making company, cash-generating company, 0-debt company. So court made a right decision to sell company as a going concern.
And independentness, transparency and effectiveness is maintained by appointing the receiver. But it's an auction of the company. Now why they are letting this go, even though they can pay entire $600 million from the DyStar's cash, they don't have to pay anything. And Kiri was prepared to give permission. Kiri submitted to the court also Kiri -- if Kiri had been asked to use this cash to comply buyout order, Kiri would have done it. The only reason I can explain why they are doing it because they think that they don't want to pay Kiri $604 million, right, and that is why they don't want to comply the order.
That's it, nothing else, no logical, no rationale, and it is difficult to understand, what you said is correct. And that is why we all were hoping that they would actually comply the order. And they are trying their luck. And they are trying their luck. Well, if company is being sold and if court gives in their favor to split as per 40-60, they think that they can sell this company, and they try to have some associate company, some related company, some French company, okay, at a lower price and give Kiri less than $604 million. So whole game from their side, what I can suspect is to give Kiri lesser than $604 million. So that is what they are trying to do probably, that's what I can think.
Yes. Okay. And you were earlier telling about the valuation in your mind of DyStar, but I guess there was some another question is between. So according to you, what's the fair valuation of DyStar?
If you -- I mean if you asked me last year's DyStar EBITDA was $166 million. That is after their taking out all kinds of fees, okay? And it was a reported EBITDA of $166 million. Now this year's EBITDA, no doubt, the whole market is down this year, but it's temporary. Next year could again be a better year. So if you look at the steady-state EBITDA and proven track record for 10 years, it's minimum $150 million of EBITDA, correct?
Now even if you estimate on $150 million, you are much better valuer than what I can imagine, but at least 10p would get you $1.5 million plus cash in the company. By next -- by half of this year or end of this year, it would be $600 million of cash. So let us say current $500 million cash. Even if you add $500 million to $1.5 billion, it comes to $2 billion.
We'll take the next question from the line of Dilip Shivprakash, an individual investor.
Sir, I just wanted to know, is there further scope of the delay tactics from Senda because you were saying that it can be challenged in an appeal's court.
Right. So they can exercise their right and go to appeal court or the Supreme court and file an appeal, but we have been advised by our counsel and we have seen the precedences that there is no stay on the execution. So if the court decision comes, sell the company, appoint a receiver, transfer cash to Kiri, it cannot be stopped. So enforcement execution for recovery is to go on. It is not going to stop. So we don't see any further delay. And Singapore court this time as well as we found it quite strict, quite efficient and quite reliable if you ask me.
They completed within the time frame of 5 months what they decided, what they mentioned, what they confirmed and they executed very fast. So I admire the way enforcement hearing took place. And I'm sure that they would do justice and not allow any other delay tactics to cause delay to sell the DyStar. I don't think they would entertain any such delays.
Okay. Sir, but logically speaking, if they are not going to stay the order and they can still go on and appeal, logically [Foreign Language].
[Foreign Language] it becomes a paper appeal, correct? You have to understand that the order has been passed, not honored, enforcement court -- it is court happiness to do enforcement. Court had to get involved in enforcement because the other party has not complied with the order, correct? So enforcement proceeding was not an open court proceeding. It was a chamber's proceeding. It was in the chamber of the judges. Even though we were there in the court room, it was not in an open court, correct?
Then -- so when you decide that the -- when you decide at that point that the defendant has failed to comply, has dishonored the judgment, who have made the consequential order to recovery -- to execute the recovery, that recovery cannot be stopped or should not be stopped. Presidencies show that Singapore Court was quite strict in executing enforcement judgment. You are now enforcing -- I mean executing the enforcement judgment, not the final decree judgment. There's a difference there, right? So you go to appeal -- one can go to appeal, it's their right, they can do it, right? But then it doesn't stop the recovery.
The next question is from the line of Arshad, an Individual Investor.
My question is regarding your recent MOUs that you did for green hydrogen. We have a subsidiary called Green Kiri Renewable Energy. So my question is that are we looking to invest a part proceeds into renewable space, are we looking in that sector?
We are looking at that sector. We are looking at several sectors. Again, we have not crystallized where we will invest, but it is also a very important sector, and it is a factor we are seriously looking at, correct.
We will take the next question from the line of Suyash, an individual investor.
My question is, in one of the earlier questions you had answered that this quarter, Kiri could be EBITDA positive. So do you see that the industry, the dyes and pigment industry that was going to such a severe downturn. Do you think that the durable bottom has formed? And do you see FY '25, '26 being much better from what it was earlier?
I believe so exactly. So we -- I believe that we have bottomed out. And now the improvement and the recovery phase has slowly started, I think so.
Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments.
I thank you all of you for participating in today's earnings call. I'll see you all next quarter. All the best. Thank you very much.
Thank you. On behalf of Kiri Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.