Intl Banks Figure High In Exides New Consortium

In a financial restructuring move, the Rajan Raheja-controlled battery major Exide Industries Ltd has decided to reduce its number of bankers from 11 to around seven.

According to industry sources, the company is likely to move Oriental Bank of Commerce, Punjab National Bank, United Bank of India and Bank of Tokyo-Mitsubishi out of the consortium, and appoint them as bankers to its lesser-known unit, Exide Products (EPL).

The State Bank of India and ANZ Grindlays, however, will continue to remain the lead bankers of the company. Hongkong Bank, Citibank NA, Standard Chartered Bank, Banque Nationale de Paris and HDFC Bank would form the reorganised consortium.

 

"We have decided to move some of the banks to EPL for administrative convenience. With the turnover of Exide Industries set for rapid growth, we feel this arrangement would streamline the company's operations," Barun Das, vice-president & company secretary, Exide Industries told Business Standard.

Industry sources, however, claim that the company's consortium of banks had become unwieldy, and hence the move to shrink the consortium.

The board of directors of Exide Industries, which had discussed the issue at a board meeting held last week, is yet to take a final decision, Das said.

Currently, ANZ Grindlays Bank plc is the main banker of Exide Products Ltd, the marketing arm of Exide Industries with a share capital of Rs 15 lakh. As on March 31, 1997, the company's sales stood at Rs 133.62 crore. Exide Industries posted a 42 per cent growth in net sales in the last financial year, and net profit rose 52 per cent to Rs 30.92 crore. The company's turnover, which stood at Rs 509 crore in 1996-97, is expected to double by the turn of the century.

The management also anticipates a six-fold rise in exports from Rs 16 crore registered in the last fiscal.

Exide Industries proposes to enhance its capacity by five million units by 2000. It has a 60 per cent share of the Rs 600-crore organised battery sector in India.