Financial Daily from THE HINDU group of publications
Wednesday, Apr 27, 2005
Mergers & Acquisitions
Ruia group all set to acquire sick Orissa PSU
Pratim Ranjan Bose
Kolkata , April 26
AFTER turning Jessop & Co around, the Rs 500-crore Ruia group is now set to acquire Hirakud Cables, a sick aluminium conductor wire and transmission tower manufacturing State PSU in Orissa.
The group, which had acquired majority stake in the sick Central PSU Jessop & Co in September 2003, is also planning to sell its flagship Ruia Cotex textiles business to focus on the engineering sector.
Speaking to Business Line today, the Ruia group Chairman, Mr Pawan Ruia, said that though the Orissa Cabinet Committee has already cleared the disinvestment proposal, the acquisition has been delayed because of a few cases, including one filed by an employees' union, pending at the Orissa High Court.
"We are carrying out discussions with the petitioners to resolve the issues shortly."
According to Mr Ruia, the acquisition of Hirakud Cables will serve as a forward integration for Jessop's current line of business.
Hirakud Cables has two manufacturing facilities at Hirakud and Bhubaneswar; it offers a complete package with turnkey construction of transmission lines for the power sector.
Having once registered a turnover of over Rs 100 crore, the company had turned sick in later years and was identified for disinvestment by the Orissa Government.
Meanwhile, the Ruia group is planning a change in its business portfolio, with Jessop set to emerge as the flagship company.
Ruia Cotex, which has been the flagship so far, is now up for sale.
It has three manufacturing units at Ganganagar (West Bengal), Bhiwari (Rajasthan) and Ghaziabad (UP); the Ganganagar unit was shut down a few years ago. The company manufactures yarn, which is processed to grey fabric.
"We intend to make engineering our core business and are now working on selling the textile business," Mr Ruia said. The group, however, will retain its sugar mill as it is doing well.
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