Kilburn Engg To Seek Nod To Up Borrowings

Kilburn Engineering Ltd, a Williamson Magor group company, will seek shareholders' approval to borrow up to Rs 200 crore from financial institutions (FIs) and banks.

At an extraordinary general meeting (EGM) in 1995, the company has secured the shareholders' approval to fix the borrowing limit at Rs 75 crore.

In view of the expanded activities of Kilburn Engineering, the financial requirement of the company has increased substantially.

The company has secured foreign currency loan from IDBI by way of hypothecation of plant and machinery imported out of the loan, joint equitable mortgage of all the company's immovable properties at Baroda and also hypothecation of the company's movable properties. The long-term working capital resources of Kilburn Engineering were augmented by a loan of Rs 5 crore from IDBI.

 

According to the annual report of the company for 1997-98, it has invested in quoted shares of Kilburn Chemicals which has accumulated losses of Rs 9.90 crore in 1996-97, involving substantial erosion in the net worth of the company.

Kilburn Chemicals is in discussion with FIs regarding its rehabilitation programme.

The extent of recovery of the value of investment is dependent upon future course of action and rehabilitation programme, the quantum of which cannot be ascertained at this stage and provision therefore has been made in this regard.

The ongoing recession in the capital goods industry had an adverse impact on the company's operations. Paucity of fresh investments in the industries catered to by the company resulted in a reduction in the intake of orders. There is a sharp drop in the backlog of orders at Rs 54 crore in 1997-98.

Consequently, though the turnover rose by 32 per cent, production at the two plants could not be maintained at the expected levels.

The underutilisation of facilities and resources contributed to the loss incurred during the year. Kilburn Engineering posted a loss of Rs 4.09 crore in 1997-98 against a net profit of Rs 1.51 crore in 1996-97. In view of the loss sustained in the year, the directors of the company are unable to recommend any dividend on the equity shares.