The Hindu Business Line : Eicher drops plan to sell Thane unit

EICHER Ltd has shelved plans to sell its gear unit under Eicher Demm and has charted out a turnaround strategy for the division. The company, which operates two gear units, had proposed to sell off its loss-making Thane unit.

"There was some interest shown for the Thane unit by a potential buyer and the process of due diligence was gone through. However, mutually acceptable terms for the deal could not be arrived at with the interested party and hence the matter stands dropped. Eicher Demm's plan now is to achieve a turnaround in the performance of the unit and start making profits," an Eicher official said.

As part of a strategy to wipe out losses, the company is identifying newer customer segments including international markets for its gear unit. "The restructuring is primarily related to the portfolio of the business in terms of customer segments. We are focusing on the export segment and have achieved significant success in obtaining orders from international markets, especially the US," the official said.

Eicher Ltd's Gears segment has been incurring losses for several years. This segment incurred an operating loss (excluding non-allocable expenses and interest) of Rs 2.1 crore during the financial year April 2002-March 2003.

"The whole approach is to improve the top line through change in portfolio and improve profitability by simultaneously cutting down costs of operation," the official added.

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