The Hindu Business Line : Matsushita's Indian subsidiary plans capital reduction

MATSUSHITA Television & Audio India Ltd, the Indian arm of Matsushita Electric Industrial Company, which has not been in the `pink of health', hopes to start making profit by the next fiscal (2004-05). Besides, beginning November, the company will be called, Panasonic AVC Networks India Co Ltd.

Disclosing the company's strategy to get back into good health, Mr Kazuo Ogishima, Managing Director, Matsushita Television & Audio, said, "The company has opted for a capital reduction plan to wipe out accumulated losses. As per this plan, the preference capital of Rs 39 crore will be reduced to bring down the loss and to make the balance sheet strong and healthy."

Elaborating further on the financial health of the company, he told Business Line that the current turnover of the company (for 2002-03) is Rs 120 crore. On how the capital reduction plan will be used, Mr Ogishima said, "With the capital reduction plan our intention is not to increase the turnover but to wipe out the accumulated losses and impairment of assets. And with this restructuring, the company hopes to become financially sound and target healthy growth."

Further, the Japanese parent, which has 55 per cent stake in the company, has been infusing fresh capital into the entity. The current equity base of the company is Rs 89 crore, which includes Rs 50 crore equity capital and Rs 39 crore of preference capital. The company has the capacity to manufacture two lakh TV sets and four lakh audio units per annum at its production facility in Noida.

Commenting on the reasons behind the company's current health despite `National' being an established brand, Mr Ogishima said, "Panasonic is establishing itself as a brand in India. We are not into big numbers and therefore at the moment there is a pressure on our bottom line. The Indian market is price-sensitive and we do not compromise on quality."

Mr Ogishima said new launches in the offing comprise a 51 inches projection TV, PS series of flat models including 21 inches and 29 inches and VK series of Audio Hi-Fi systems, which includes models such as VK30 (1,400 Watts) and VK 50 (3,200 Watts).

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