Leader Hunts Buyers To Exit Ailing Incab
Leader Universal Berhardt of Malaysia, which holds around 52 per cent in power and telecom cables manufacturer, Incab Industries Ltd, is scouting about for buyers to divest its stake and exit the ailing venture.
Confirming this, Incab board sources said: "We are actively looking for joint venture partners and are in dialogue with some. We hope to finalise something within a month or two." Representatives of Leader Universal Berhardt have made a number of visits to the country in recent times, confirmed sources. Meanwhile, the company is supposed to submit its reconstruction plan to the Board for Industrial and Financial Reconstruction (BIFR) within May 30.
Leader Universal Berhardt will have to intimate BIFR its sellout plan. "We will intimate the board once the deal is closed," said board sources. According to high-level company sources, the promoters and bankers have in unison decided to pump in Rs 125 crore to pay off a part of its outstanding loans. The company's outstanding loans from financial institution and banks stand at Rs 117 crore.
"Of the outstanding loans, Rs 70 crore will be paid off soon. We intend to defer the payment of the balance ," said company sources.
The company's accumulated losses till December 31 stand at Rs 165 crore, which includes outstanding loans to banks and institutions.
The company also proposes to offer voluntary retirement scheme (VRS) to its surplus work force of 250 employees, which is roughly 10 per cent of its staff strength. The company is likely to spend around Rs 2.5 crore on the VRS. In addition to this, Rs 50 crore or thereabouts will be spent on capital goods and other expenses essential for the revival of its operations.
Company sources, however, indicated that there is need for at least another Rs 50 crore for the company to become viable in the long run.
"There is tremendous potential in the company, but needs a thorough restructuring, which will require more funds," sources said. On the operational front, the company intends to focus on power cables rather than telecom cables. "Though the company has been suffering because there has not been much increase in power generation, we are focusing on power cables because it offers better margins. Besides, production of telecom cables require high capital expenditure, which we cannot afford at this point," a director of the company said.
He said, the company has orders of Rs 89 crore from different public-sector companies, and corporates as Tata Hydro, Bharat Heavy Electricals Ltd and National Thermal Power Corporation.
"The company's inherent strength is enormous, given the brand equity we have, but our liabilities are very high. Our only hope of revival is a committed management," said the director.