Burn Standard Posts Cash Loss Of Rs 24 Crore

Burn Standard Company Ltd (BSCL), a subsidiary of Bharat Bhari Udyog Nigam Ltd (BBUNL), has posted a cash loss of Rs 24 crore for the year ended March 31, 1998, on a turnover of Rs 245 crore. The company had registered a loss of Rs 20 crore in the previous fiscal.

Addressing a press conference here yesterday, BSCL managing director R P Singh said, BSCL has received a prestigious order for supplying wagons worth Rs 65 crore from Rashtriya Chemicals & Fertilizers (RCF).

He also said, the Board for Industrial & Financial Reconstruction (BIFR) package for Burn Standard subsidiary, RBL Ltd, is expected to get the final clearance from the government in a week's time.

Indian Railways, which account for nearly 75 per cent of the total orders for wagons in the country, is likely to procure 27,000 wagons during the current year. Of this, Bbunl is likely to bag around 50 per cent of these orders.

BSCL in turn will get a substantial portion of the orders. BSCL is currently the largest wagon builder in the country with two units at Howrah and Burnpur in West Bengal.

The company is currently awaiting a Rs 141-crore BIFR package for which the next hearing will be on October.

The BIFR proposal, made by the operating agency Industrial Investment Bank of India (IIBI), envisages closure of unviable units, especially the sick refractory units, restructuring of capital base by conversion of loans to equity and zero-debt debentures, infusion of fresh funds and downsizing of workforce from the 9,600 to sustainable level of around 6,700.

BSCL, which has already initiated a voluntary retirement scheme, is likely to come out with another VRS scheme soon, Singh said.

The IIBI report had earlier recommended in its report the closure of five units of BSCL namely, the No 2 refractory of Ranigunge group, the Durgapur refractory, the Gulfurbary unit in Bihar, the Andal unit and the Jabalpur refractory.

IIBI had also suggested a capital investment of Rs 64 crore and the company's off-shore division be converted into a project division and be made to operate under the engineering division of Burnpur. Besides, railway rolling stock wagons, BSCL manufactures host of components, forgings, refractory products, springs, steel castings, structural steel works, mining equipment and accessories, heavy machine products and turnkey projects.