Texmaco to hive off manufacturing business

August 11th, 2008 - 9:16 pm ICT by IANS  

Kolkata, Aug 11 (IANS) Wagon maker Texmaco Ltd plans to hive off all its manufacturing businesses into a proposed subsidiary and to raise Rs.2 billion through private equity funds, said an official here Monday. “We are exploring ways to separate all our manufacturing activities to a new subsidiary while retaining only investments and real estate businesses with the parent company,” executive vice-chairman Saroj Poddar told reporters on the sidelines of the company’s 68th annual general meeting.

The company is planning this restructuring to get a better valuation for its wagon making, process engineering and foundry business and to raise more than Rs.2 billion from private equity players, he said.

Texmaco has appointed consultancy firm Ernst and Young to work out the restructuring proposal. Investment management firm I-Sec has been engaged to work out the amount of fund that needs to be raised.

“Texmaco would turn into a holding company following the restructuring,” Poddar said.

The company expects reports from both the consultants to be ready within two-three months, after which both of them would work in tandem to finalise the entire structure of the initiative. It expects the restructuring process to get over by the current fiscal end.

Texmaco plans to double its wagon making capacity from the present 20 wagons a day by September 2009.

“From 20 wagons a day, we are ramping up our capacity to 30 wagons by the end of current financial year and then to 40 wagons a day by September next year,” managing director Ramesh Maheshwari said.

The wagon business is dependent on orders from Indian Railways. It produced 4,130 wagons in 2007-08.

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