Financial Daily from THE HINDU group of publications
Tuesday, Jul 02, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jul 02, 2002 |
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Corporate
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Restructuring Nicco Corpn charts out eight-year revamp plan Kohinoor Mandal
KOLKATA, July 1 IN an attempt to turn around, Nicco Corporation Ltd has worked out an eight-year restructuring plan and is also willing to sell any of its asset or business which will help it garner long-term funds. According to Mr Rajive Kaul, Chairman and Managing Director, Nicco Corporation has already started talks with banks and financial institutions for this restructuring programme. It is at various stages of approvals. "The first target is to improve from cash loss to cash breakeven and there after to cash profit. Finally, it will be net profit. Eight years will be needed for this total turnaround. The package has been worked out by LB Jha & Co,'' Mr Kaul told Business Line. For the year ended March 31, 2001, Nicco registered a turnover of Rs 436.56 crore and a net loss of Rs 3.34 crore. The company's debt exposure is Rs 164.27 crore and its annual interest burden is Rs 30.26 crore. Results for the financial year 2001-02 are likely to be no better. Nicco Corporation is willing to sell any of its assets or businesses as it will give them long-term funds. Earlier, the company sold off its Uttar Pradesh-based battery division to the Kirloskars. It also sold off its US-based software firm in two tranches. The company also sold a part of the Nicco House some time ago. "We are not against selling any business or asset but we will not be distress sellers. We want to get the right appreciation of our business. Our aim is to get long-term funds which will help us to clear our loans,'' Mr Kaul said. Nicco Corporation, at present, is in the business of cable and steel manufacturing, apart from turnkey engineering projects. Mr Kaul said that the projects division is doing extremely well and currently has an orderbook of Rs 160 crore. The cash-starved company has also decided to issue shares to all its employees against 10 per cent of their salary. The decision was taken at the end of 2001 and was brought into effect from January 1, this year. The five major employees' unions have agreed to this proposal and this arrangement will continue for five years till December 31, 2006. A special body called Nicco Restructuring Employees Trust Fund has been created for this purpose. Every employee, including the chairmen, managing director and other directors will forego, one-tenth of their salary every month, and against it, shares will be issued. The promoters are currently holding about 29 per cent stake in the company. The institutional investors' stake is almost 45 per cent and the rest 26 per cent is held by the public. The paid-up capital of Nicco Corporation is Rs 34.63 crore on an authorised capital of Rs 38 crore. Last week, the shareholders approved the scheme of issuing fresh shares to the employees. The company will be issuing a little over ten lakh shares every year.
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