Titagarh Wagons plans Cimmco-Birla revival

Kolkata-based wagon manufacturer Titagarh Wagons Ltd’s (TWL) plan to buy stake in the sick wagon unit of the S K Birla Group, Cimmco-Birla, will materialise in a couple of months.

A fresh proposal was placed before the Board for Financial and Industrial Reconstruction (BIFR) to revive the company in September last year. "We expect to get the BIFR nod in less than two months' time when we can start work on revival plans," said J P Chowdhary, chairman and managing director of Titagarh Steels Ltd(TSL). TWL along with the SK Birla Group will have to repay the Rs 500 crore debt on Cimmco-Birla's books.

"Net fund requirement to revive the sick company is yet to be worked out. It would include investments on modernisation of plant and machinery, workers' payments as well as repaying debt," Chowdhary added. Modernisation was first on the agenda while the debt would be paid back over a period of time.

As for the TWL-FreightCar America joint venture to manufacture high axle load wagons, the government has initiated the land acquisition process near the Kalyani expressway. Around 100 acres was identified at the location last year. While the project cost is around Rs 150-200 crore, FreightCar is likely to bring in equity. It holds a 51 per cent in the JV.

Meanwhile, the process of merging TSL with TWL after it was approved by the company's board in May this year, would take around four to five months time.

The TWL board has approved the merger of TSL with itself whereby the shareholders of TSL would get one equity share of TWL for every 36 shares held by them.

While TWL made railway wagons, heavy earth moving and mining equipments, TSL manufactured castings used for railway wagons and other heavy engineering products.