Date:18/08/2004 URL: http://www.thehindubusinessline.com/2004/08/18/stories/2004081802160200.htm

Back Willard India defers bifurcation of company

Kohinoor Mandal

Kolkata , Aug. 18

THE management of the ailing Willard India Ltd has delayed the proposed bifurcation of the company into its two businesses, namely jute and sugar.

The board of directors had taken this decision almost a year ago but till date nothing has been finalised. A senior official said that everything is almost ready and a final announcement will be made shortly.

"We were studying the nitty-gritty of the proposed bifurcation. We would like to consider a few more aspects before making the final announcement. Due to these factors, the bifurcation has been delayed," the official said.

It is also learnt that a couple of consultants appointed by the company have already worked out the scheme of arrangement.

Explaining the rationale behind the proposed bifurcation of the company, the official said that the fortunes of both the commodities were cyclical in nature. "So it is better to have two separate companies."

The management is of the opinion that the presence of a jute mill in a sugar company is hampering the future expansion plans of the sugar business. In 2003, the jute mill also suffered a workers' strike for over almost five months.

The company has approached banks and financial institutions for financial restructuring which is being considered, according to sources.

Willard India is the flagship company of the Delhi-based Mr K.K. Bajoria. About 18 months ago, Mr Bajoria injected capital of approximately Rs 2 crore into Willard India through a group company. Equity shares were allotted to this company on a preferential basis.

Willard India has a jute mill in Andhra Pradesh and a sugar unit in Uttar Pradesh.

While the jute mill's capacity is 95 tonnes per day, the sugar unit can crush 3,500 tonnes per day.

Earlier, Willard India had a battery manufacturing facility too. A few years ago, it turned sick and the division was spun off into a separate company by the management and referred to the BIFR.

Sources said that Willard India is contemplating demerger of the two businesses into two wholly owned companies.

This would be done either through a sale or transfer of the respective businesses, along with assets and liabilities.

The two consultants appointed for the job are Deloitte Touche Tomatsu and the Kolkata-based legal firm, Khaitan & Co.