The extension has been sought in anticipation of a revival in the polyester market fortunes in less than a year. Raymond Synthetics, which has been defaulting on repayment for over a year, has institutional liabilities amounting to Rs 70 crore.

"Raymond Synthetics has been talking to us for an extension in the repayment period. The company has not been prompt in the repayment for over a year. Institutions have asked them to prepare a detailed plan," said sources close to ICICI, the lead institution.

Other industry sources confirmed that Raymond Synthetics has defaulted on its debenture payments and the total outstanding is to the tune of Rs 10 crore. The last instalment which was to be made in November 1998 is still outstanding, according to those who subscribed to the NCDs of Raymond Synthetics.

The company had, in January 1991,launched 33.9 lakh non-convertible debentures of Rs 100 each at a coupon of 14 per cent. It collected Rs 33.9 crore through this issue.

The mode of repayment of these debentures involved three instalments to be paid back in each November of 1996, 1997 and 1998. The company has defaulted on the last instalment, according to subscribers of the NCDs.

"About 95 per cent of the payment to be made is still outstanding by the company," said sources.

Raymond's inability to repay the dues was a result of the downturn in the polyester market which in turn crippled its ability to pay up on time. The company has a polyester filament yarn plant capacity of 66,000 tonnes.

Financial institutions have of late been rescheduling the loans of polyester companies.

Indo Rama Synthetics recently got a moratorium on the loan repayment period till 2000 after it suffered a severe setback in operations.

Raymond Synthetics recorded a net loss of Rs 32.47 crore during 1997-98 as compared with 22.28 crore in the previousyear.

The improvement of polyester prices have increased the profit margins of the company in 1998 which is expected to help it repay outstandings in the next year, said industry sources.