Gec Alsthom Seeks Arms Sale Nod

GEC Alsthom India Ltd, the Rs 525-crore industrial, power transmission & distribution equipment company, will seek shareholders' approval to clear the sale of its two divisions to GE Electrical Distribution & Control India Ltd, the Indian subsidiary of General Electric Co, in its extraordinary general meeting here today. The company is also selling its engineering plastics division at Pondicherry.

The EGM will also seek clearance for the appointment of K K Moradian and V F Banaji as the new managing director and wholetime director respectively. Banaji will also be in charge of human resources.

GEC Alsthom, in the EGM notice to shareholders, said the decision to sell the two divisions, at Hosur and Pondicherry, comes in the wake of the fact that the parent company Alsthom NV is moving out of the low voltage (LV) equipment business.

 

The notice says that the directors felt that the company's growth and profitability would be hit in the long run as "..the technology for developing new range of products in LV applications will not be available to the group."

The board will also get a new name of the company approved. Earlier, the board agreed on an overall consideration of not less than Rs 75 crore for the divisions. Arthur Andersen & Associates had suggested a price between Rs 70 and 76 crore.

No major changes in the company's business profile or overall management structure is on the cards.

The company had earlier decided to have a non-executive chairman and a separate managing director who will, in effect, be the chief executive officer. At its last board meeting on February 26, 1998, the company appointed its non-executive director S K Poddar as its non-executive chairman.

During the first of the last fiscal, extraordinary items( mainly through the sale of Chennai property for Rs 10.2 crores) propelled net profits to Rs 2.38 crore against a loss of Rs 2 crore in the previous year's corresponding period.