Rane (Madras) to sell stakes in 2 JVs to group co.

By Our Special Correspondent

CHENNAI, NOV. 30. The Rane group has embarked on a major financial restructuring exercise to shore up its flagship company - Rane (Madras) - which is weighed down by heavy interest outgo.

Under the revamp move, the auto ancillary maker Rane (Madras) will palm off its equity investments in TRW Rane Occupant Restraints and Rane Nastech to Rane Brake Linings.

According to Mr. L. Ganesh, Vice-Chairman of the group, Rane (Madras) had invested heavily in expansion. But the investment ``had not resulted in sales'' due to an assortment of factors outside its control. Much of its woes could be traced to the fact that Rane (Madras) was mainly doing original equipment business and its fortunes were, hence, directly linked to that of auto units. As a consequence, the company, had been saddled with heavy interest burden, he said.

Mr. Ganesh indicated that Rane (Madras) would realise close to around Rs. 8-9 crores through the restructuring exercise which would be utilised to retire some high cost debts. Quizzed as to what benefit would Rane Brake Linings derive by buying Rane (Madras)'s equity holdings in joint ventures, Mr. Ganesh said the group was keen to continue the joint venture and hence embarked on the `equity shuffling strategy'. The objective, it appears, will be two-fold - to bring Rane (Madras) back to normal health and keep its associations with the joint venture partners in tact.

Rane (Madras) and Rane Brake Linings have convened board meetings on December 4 and 5 respectively to consider the matter.

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Section  : Business
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