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| Texmaco plans arm to raise funds |
| BS Reporter / Kolkata Aug 12, 2008, 05:42 IST |
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Kolkata-based KK Birla group engineering firm Texmaco (TL) is looking into transferring its heavy engineering division to a newly formed subsidiary in order to raise resources.
The decision will be taken within two-three months, said Saroj Poddar, vice-chairman of Texmaco.
Speaking on the sidelines of the company's 68th annual general meeting, Poddar said the company has appointed Ernst & Young (E&Y) to examine options to raise resources through the subsidiary route.
This apart, the company has appointed ICICI Securities to identify private equity partners willing to invest in the new company.
Based on the results of the E&Y study and feedback from PE funds, the board would take a call in three months or so, said Poddar.
While the private equity firms will be investing in the newly formed subsidiary, Texmaco will remain the holding firm, he added. Around 10-15 per cent stake would be diluted in the new company, according to Poddar. The main objective behind setting up the subsidiary was to raise resources and take advantage of the emerging business opportunities in the sector. Texmaco aimed to raise nothing less than Rs 200 crore from PE funds, said Poddar.
The company recorded a gross turnover of Rs 937.18 crore in the last financial year, up 97 per cent from Rs 476.13 crore in FY07. Currently, its wagon production capacity is 20 wagons per day. The company aims to increase this to 30 by early 2009 and further to 40 by September 2009, said Ramesh Maheswari, president and COO of Texmaco.
The company recently signed an MoU with Australia's largest rail technology solutions provider United Group.
Negotiations for the joint venture were on and it could be completed by FY09-end, said Poddar.
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