Thanjavur Textiles comes under Ramco fold

By P. Narasimhan

CHENNAI, DEC. 6. The Ramco group has gained control over Thanjavur Textiles following completion of a preferential issue of 7.5 lakh equity shares at a price of Rs. 14 per share as per the Securities and Exchange Board of India (SEBI) guidelines to each of two Ramco group companies - Rajapalayam Mills and Ramco Industries on September 29.

(The preferential issue was made to revive and rehabilitate the company from possible sickness on account of erosion of the networth caused by the accumulation of huge losses due to suspension of operations since April 1988.)

After the preferential issue, the paid up capital of the company, which stood at Rs. 1.20 crores on March 31, 1999, has increased to Rs. 2.70 crores on September 30, 2000.

After the infusion of fresh capital, Ramco Industries and Rajapalayam Mills have a stake of 27.78 per cent each, Mr. P. R. Ramasubrahmaneya Rajha 0.73 per cent, taking the total stake of Ramco group to 56.29 per cent. (The Ramco group's stake was 1.65 per cent in the earlier capital of Rs. 1.20 cores.) Other co- promoters have a stake of 12.30 per cent, financial institutions 5.28 per cent and the public 26.13 per cent.

To reflect the core activity, it is proposed to change the name of the company to Thanjavur Spinning Mill and the company is seeking the shareholders' nod at the annual meeting to be held on December 20.

The company's open end unit at Tiruttani was closed from June 1 as the operations were found unviable and the dues to the workmen of this unit were settled at a cost of Rs. 6.51 lakhs. The plant and machinery are being shifted to the Thanjavur unit and the relocation is expected to improve the bottomline of the company.

During the 18 months ended September 30, 2000, the company reported a loss of Rs. 77.59 lakhs after meeting all expenses but before interest and depreciation. The accumulated losses have been adjusted against reserves which have now a residual small credit of Rs. 19.67 lakhs.

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