The mid size railway wagon manufacturing company, Titagarh Wagons Ltd and the JP Morgan Group have announced that they are planning to jointly presenting a scheme for revival and rehabilitation of the sick Cimmco Birla Ltd (CBL) to BIFR in the months of June or July this year. The officials of the Titagarh Wagons Ltd have informed that they are going to enter the capital market with an IPO, opening on 24th March and they are expecting the scheme to pave the way for the proposed acquisition of CBL, made by TWL.
Informing that the CBL is a part of the S.K. Birla Group and the TWL is planning to acquire the company for an amount of Rs 35 crore. The sources from the TWL have informed that this acquisition is likely to significantly add to the wagon manufacturing capacities of TWL. The sources added that he two companies, TWL and JP Morgan, did acquire a portion of the total outstanding secured debt of CBL, in the past and they have now stepped up their efforts for preparing the revival scheme. The sources also said that the restructuring of the borrowings and other liabilities of the sick company are also included in the scheme.
According to one of the top officials of the company, the latest move from the companies is coming in the wake of the huge demand in the market for flat wagons to transport containers. The official added that the demand for flat wagons in the market has increased only after the authorities thrown the container freight sector open for the private participation about two years ago. While commenting on the issue, the Managing Director of TWL, Mr. Umesh Chowdhary said that the company was not willing to confirm the date for submitting the revival scheme to BIFR. However, he did comment, "this will happen very soon". He added, "We intend to acquire 51 per cent stake in CBL. Additional funding requirements beyond the amounts agreed may be funded through various methods, including debt funds or a fresh infusion of funds by TWL group". He further said that as the CBL was having a good infrastructure, it would definitely help TWL to grow its core and allied operations further.
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| Posted : 3/17/2008 |
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