| Phoenix Yule, the erstwhile belting division of Andrew Yule, is in a Catch-22 situation with the central government's disinvestment policy having gone haywire.
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| Following disinvestment of Andrew Yule's shares, the company was now controlled by the Continental group with a 74 per cent stake while the balance 26 per cent was with Andrew Yule.
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| The 74 per cent stake was acquired by Phoenix AG, Germany, which in turn was acquired by Continental.
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| Phoenix Yule has lined up an expansion programme of Rs 45 crore but the investment would be made entirely by the foreign partner.
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| T K Mukherjee, managing director of Phoenix Yule, clarified that the buyout of shares and the expansion programme were independent projects but the company would have to sort out the buyout issue before embarking on its expansion.
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| Mukherjee said, Lodha Capital Market had been appointed for carrying out valuation of the company which was presented to the board.
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| The board had in-principle approved buyout of the remaining 26 per cent stake of Andrew Yule in Phoenix Yule.
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| However, he clarified that a final offer would be made once there was a final proposal.
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| Mukherjee said, the buyout of shares could be either in the form of foreign direct investment or buyback of shares.
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| According to the statutory regulations, the company could buyback upto 25 per cent of equity shares. It was likely that the buyout of shares was a part of the rehabilitation package that Andrew Yule had submitted to the government.
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| The expansion programme chalked out by Phoenix Yule would scale up the company's capacity from 10,000 tonne to 14,000-15,000 tonne and help the company achieve its target turnover of Rs 225 crore by 2007.
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| The company recorded a turnover of Rs 150 crore in 2005 and was eyeing Rs 156 crore in the current year.
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| The company was planning to install a new steel cord belt production line.
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| Meanwhile Phoenix Yule managed to resolve the labour impasse at its Kalyani, West Bengal, plant.
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| Mukherjee said, with the support of the government, administration and senior managers of the company, the impasse was resolved by reduction of 40 employees with a compensation amount with an average compensation of each employee of over Rs 7 lakh and total cost of Rs 3 crore. |
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