Credit crunch hits US based India infrastructure firmFebruary 18th, 2009 - 11:59 am ICT by IANS
Washington, Feb 18 (IANS) Hit by credit crunch, India Globalization Capital Inc (IGC), a US-based company developing infrastructure in India, has reported a net loss of about $1.7 million in the last three months of 2008.
IGC, based in Bethesda, Maryland, operates through two infrastructure companies in India, Sricon Infrastructure Private Limited (Sricon) and Techni Bharathi Limited (TBL).
Announcing third quarter financial results for fiscal year 2009 Tuesday, IGC reported revenue of about $3.8 million with a net loss of approximately $1.7 million, inclusive of approximately $1.5 million of one-time expenses and approximately $300,000 of foreign exchange losses.
Most of the one-time expenses in the quarter came from costs related to curtailing contracts, which it was unable to perform because of the tightening of credit, the company said. The foreign exchange losses occurred as the US dollar strengthened against the Indian rupee.
For the nine months ended Dec 31, 2008, IGC reported revenue of approximately $32 million, a net income of around $600,000, before one-time expenses and a net loss of about $374,000, inclusive of one-time expenses.
IGC CEO Ram Mukunda said: “As we said in the last quarter, due to illiquidity we began to adjust our business model and streamline our operations.”
To better position itself to obtain and generate liquidity, IGC has begun the process of creating a new subsidiary called IGC-IMT based in India, which will be responsible for the company’s mining and trading activity, he said.
“While we continue to be very bullish about the long term prospects of the infrastructure sector in India, for the short and medium term we are being proactive in conserving the relative strength of our balance sheet by scaling down operations and constraining growth until there is visibility on when the global illiquidity will abate,” Mukunda said.
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