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Thursday, May 04, 2006

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Jessop taken out of BIFR purview

Our Bureau

Kolkata , May 3

Jessop and Co Ltd has finally been taken out of the purview of the Board for Industrial and Financial Reconstruction (BIFR), two-and-a-half years since the erstwhile central public sector undertaking was taken over by Mr Pawan Ruia in August 2003. The company had been referred to BIFR in 1995.

According to a press release issued by the company, Jessop has been making profits since 2004-05. The net worth now stands at a positive Rs 8.8 crore.

"We have fulfilled our promise to take Jessop out of the BIFR net in March-April 2006," Mr Ruia told Business Line.

Bank funds

According to him, the most important impact of the development will be on availing bank funds, especially for the working capital requirement. Despite bagging sufficient orders during the last two years, the company has been facing hardship because of non-availability of finances.

The company will be approaching banks and FIs for meeting its working capital requirement to the extent of Rs 30 crore and a term loan of Rs 30 crore.

Jessop has already bagged orders worth Rs 100 crore for 2006-07. Order for wagons (which is the mainstay of the company's business) has gone up from 305 to 809 in this fiscal. Substantial growth was also recorded in orders for coaches, cranes and fabrication jobs.

Rights issue proceeds

Meanwhile, the company is still awaiting the decision of a Division Bench of Calcutta High Court to receive the entire proceeds from the Rs 52 crore rights issue made last year. Though it has been allotted the shares, the company had received only Rs 10 crore of application money.

The High Court had previously stayed an order by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). The latter had stayed the rights responding to a petition by Titagarh Industries.

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