Will bring down debt; work towards best interest of firm: Usha Martin MD

Rajeev Jhawar abstained from voting on resolution for Prashant's removal during board meeting

A day after the board of Usha Martin ousted Prashant Jhawar as non-executive chairman following a written requisition by State Bank of India nominee director, the Kolkata-based firm’s managing director, Rajeev Jhawar, tells Ishita Ayan Dutt that his sole agenda is to bring down the debt and work in the best interest of the company. Unlike Prashant, however, Rajeev is on the same page as the lender, though he abstained from voting on the resolution for Prashant’s removal during Tuesday’s board meeting. Edited excerpts:  

Lenders are worried about the debt level in Usha Martin. How will you secure the future of the company?

We will bring down the debt. We have initiated a process for the sale of the wire ropes business and will work towards the best interest of the company. 

What is the current debt level of the company?

We have a long-term debt of Rs 3,600 crore and working capital loan of Rs 500 crore.

What is the status of the sale of wire ropes division, and to what extent can you bring down the debt?

The board took a decision on February 10, 2017, to appoint a consultant to look at a sale of the division. We then appointed Royal Bank of Canada for the purpose. The process is on. It’s now halfway through.

Was the valuation of Rs 2,500 crore arrived at by Royal Bank of Canada?

No. We spoke to various investment banks which arrived at a valuation of Rs 2,000-2,500 crore for the wire ropes division.

To what extent are you working on bringing down the debt level of Usha Martin?

That would depend on what valuation we can get from the wire ropes division and a combination of earnings. The steel market is now good. 

What is the status of your mines? 

The iron ore mines are running. The coal mines will take another 18-24 months to be developed. Once that happens, cost will come down by Rs 1,000-1,200 a tonne.

Are you looking at a complete exit from the wire ropes business?

Right now, it’s at an exploratory stage. We will take a final call later.