The Hindu Business Line : Escorts may exit from more jt ventures

POST the sell-off of the Escorts Heart Institute and Research Centre (EHIRC), Escorts Ltd may be looking at divesting from a few more businesses in its portfolio.

Industry analysts have pointed out that Escorts may look at selling off its equity in a few major joint ventures.

"We will be undertaking more initiatives to restructure our debt. This might include monetising investments in our joint ventures and also taking a medium term loan to pay some of our short-term loans. Eventually, we will be looking at bringing down our debt component to Rs 500 crore," Mr Shailendra Tandon, CFO, Escorts Ltd said.

Escorts currently has debt of around Rs 1,000 crore. Industry sources said that one of the joint ventures that Escorts may look at exiting from could be Hughes Escorts Communications Ltd (HECL).

Escorts has a 26 per cent stake in HECL, a joint venture with Hughes Network Systems. HECL had a turnover of Rs 100 crore last fiscal, and is the largest VSAT service provider in the country with 4,500 VSATs installed in 513 cities.

Another likely candidate is Carraro India, a joint venture between the Carraro Group of Italy and Escorts Ltd. The company makes transmissions and axles.

The sources added that Escorts Ltd is also studying the feasibility of coming out with a public issue for Escorts Construction Equipment Ltd (ECEL).

According to the annual report of Escorts Ltd, ECEL had achieved a turnaround in 2003-04 and the company was looking at expanding ECEL's product portfolio.

The divestments would help Escorts Ltd focus and expand its core tractor business.

With the requisite funds, the company would be able to expand productivity at its tractor unit to meet both domestic and export demand.

Escorts had on Thursday said that it was selling its equity in Escorts Heart Institute and Research Centre (EHIRC) to Fortis, also a promoter of Ranbaxy, for a consideration of Rs 585 crore.

The sources added that Fortis had taken on EHIRC's debt component of Rs 75 crore.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Scaled down operations at airports — Traffic near normal in most places; service to Kolkata hit

NTPC firms up oil exploration foray

Producer price index to replace WPI next fiscal

Escorts may exit from more jt ventures

Strike hits banking operations badly

PSBs to be asked to work extra hours on Saturday

Sponsors to pay Rs 1,237 cr to Govt for UTI AMC transfer — Future stake sale only after Govt approval

Renewed interest , short covering buoy benchmark

To bring down USO subsidy by over 65 pc — TRAI favours rural connectivity through mobile infrastructure