Usha Martin To Raise $50m Through Ecbs

The Usha Martin group flagship, Usha Martin Industries Ltd (UMIL), which registered a downtrend in profits for the year ended 31 March, 1997, plans to tap external commercial borrowings up to $50 million during the current year to restructure the companys financial costs.

Usha Martin Industries declared a dividend of 15 per cent for the year 1996-97 yesterday. The companys net profit for the last fiscal slumped to Rs 12.53 crore from previous years Rs 24.45 crore despite an increase in sales to Rs 511.30 crore against previous years 327.89 crore.

The company will also raise up to Rs 57.50 crore by way of term loans and non convertible debentures from financial institutions against property mortgages.

 

Industrial Credit & Investment Corporation of India Ltd (ICICI) is also likely to extend a medium term loan to the company. The company has also filed a restructuring scheme with the Calcutta High Court for the amalgamation of its wholly owned subsidiaries, UMI Lease Finance Co Ltd and UMI Excel Investments Ltd with the company with effect from 29 March, 1997.

The shareholders, at a meeting held in May, had approved the amalgamation scheme and the final HC order is awaited. The company had earlier desubsidiarised UMI Princep Investments Ltd.

We have seen a 23 per cent rise in sales during the first five months of the current fiscal,said B K Jhawar, chairman and managing director, UMIL, at the 36th annual general meeting here yesterday.

Despite general recession in the international market for steel and allied products, we have improved our export performance. We have achieved an export turnover of Rs 96.12 crore (fob) representing an increase of 30 per cent over the previous year, he said.

Efforts are on to improve the companys international marketing and distribution network, and also enhancing the brand image. The company is hoping to emerge as one of the biggest wire ropes manufacturer in the world.

The company, however, currently faces a challenge in harnessing its proximity to raw materials and its integration from ore to ropes.