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| Ruias plan to divest at least 20% in Jessop |
| BS Reporter / Kolkata Jul 08, 2009, 00:51 IST |
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 The Kolkata-based Pawan Kumar Ruia group wishes to list Jessop and Co., one of its firms, on the Bombay Stock Exchange. For doing so, it will have to offload its shares in Jessop, an engineering and infrastructure development firm.
At present, the promoters’ holding in the company is 94.5 per cent, which will have to be brought down to 75 per cent. As per BSE norms, at least 25 per cent of the company’s issued capital should be with non-promoter shareholders.
“Currently, around 94.5 per cent is with the promoters, 4.5 per cent with the government and around one per cent with the public,” Ruia told reporters here today, at the company’s annual general.meeting.
He said there were two ways of doing so. One, by divesting the promoters’ holding, and the other by bringing in a strategic investor. “We are waiting for the opportune time when we will get a fair value for our shares. We can go for offloading of around 15 per cent of promoters’ stakes and place 10 per cent equity shares with a strategic investor,” he said, adding that quite a few private equity firms had already shown interest in the company.
Jessop and Company Ltd, a very old firm which was taken over by the govenrment in the 1970s, was referred to the Board for Industrial and Financial Restructuring (BIFR) after its net worth was eaten away. It was later taken over by the Ruias. “It is no longer a sick company now, so we are keen to get it listed on the BSE within this fiscal,” Ruia told reporters. He did not want to divulge how much the company was looking at raising from the listing.
Jessop registered net sales of Rs 207.6 crore in 2008-09 were up by 57 per cent from last year’s turnover. Its net profit grew by 8.47 per cent to Rs 20.24 crore in FY09.
The company, which is primarily a wagon supplier to the Indian Railways, is now also looking at newer lines of business like engineering and production contracts (EPC). “We are looking at bagging contracts for building bridges, power and steel plants, as well as offshore exploration rigs,” Ruia said. The company currently has an orderbook of Rs 45 crore in the EPC division.
It is also in the process of building a foundry unit in Durgapur, where the company has around 115 acres of leasehold land. It had bought plant and machinery from Mumbai-based Mukand Ltd for Rs 8 crore around two years earlier. The net investment on the foundry unit will be around Rs 30 crore, of which around Rs 12-15 crore has already been spent.
Pawan K Ruia today indicated he was keen to step down as the executive chaiman from his group companies, as he wanted the firms to have a separate professional management that could work independently. The Ruia Group will continue to remain as the holding company, of which Pawan Ruia will be the chairman.
“It will control the group companies through appropriate reporting systems,” he said, while he’d like to devote his time on new acquisition propositions. He stepped down from being an executive chairman of Jessop and Co last year, and is now looking for a suitable candidate to head Falcon Tyres. The Group has a turnover of around Rs 2,000 crore and the noted group companies include Dunlop India Ltd, Falcon Tyres Ltd, Schlegel Automotive Europe Ltd and IDCOL Rolling Mill Ltd.
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