Tobacco-to-hotels major ITC Ltd will be restructuring its subsidiary companies. And as part of the process, it will wind up BFIL Securities, a subsidiary of ailing BFIL Finance Ltd, which in turn is a subsidiary of ITC Bhadrachalam Paperboards Ltd (ITC-BPL).
ITC holds 60.25 per cent of the paid-up equity of ITC-BPL and through it, 99.99 per cent of the equity of BFIL and BFIL Securities.
The company has informed shareholders that voluntary winding-up proceedings have been initiated for BFIL Securities.
The company was handling the securities business of BFIL, which is mired in its own difficulties.
ITC-BPL's total exposure to the two subsidiaries is Rs 72.24 crore. BFIL incurred a loss of Rs 6 crore in 2000-2001 and is now solely focused on recovery of dues from clients.
It has recovered Rs 83.25 crore in four years, and used it to pay off debts of Rs 57.76 crore to banks and FIs and Rs 15.71 crore to repay fixed deposits. The accumulated deficit of BFIL was Rs 88.85 crore as on March 2001.
Other subsidiaries where restructuring is taking place include ITC Infotech India Ltd (IIIL), which is the corporate entity under which the dispersed IT operations of ITC have been brought together.
Some of the employees and assets of ITC's information systems division has been transferred to IIIL, which has also bought out ITC's total stake in ITC Infotech UK and ITC Infotech (USA) Inc.
IIIL has been permitted by the Reserve Bank of India to invest Rs 18 crore (almost US$ 4 million) in acquiring the share capital of the UK and US companies and building up the US business.
However, the company has been affected by the turbulence in the technology sector caused by slowdown of the US economy and closed the year with a profit of Rs 7.3 lakh.
It still has to wipe out its accumulated loss of Rs 3.87 lakh as it was carrying a loss of Rs 11.21 lakh in its books.
ITC has also picked up 70 per cent of the equity of Landbase India Ltd (LIL) from International Travel House Ltd (ITHL). LIL came with eight subsidiary companies in tow.
After buying out ITHL, ITC has merged the eight subsidiaries into LIL under order of the Delhi High Court in March 29, 2001, with the merger taking effect from April 2000. In consequence the companies were dissolved without being wound up.
Following the restructuring, LIL is expected to take up development of a resort hotel and golf villas at the Classic Golf Resort in New Delhi, and complete development of its Laburnum residential unit complex.
