The Hindu Business Line : Willard to hive off sugar, jute units

THE KK Bajoria-owned Delhi-based Willard India Ltd is transferring its sugar and jute businesses to two separate companies and is itself becoming the holding company.

According to the proposal cleared by the company's board of directors on March 14, the jute business will be transferred to Chitavalsah Jute Mills Pvt Ltd and the sugar business to Agauta Sugar and Chemicals Pvt Ltd.

A finance company, Perfect Career Consultants Pvt Ltd, has been created to accommodate certain non-performing assets. The restructuring will take effect with retrospective effect from October 1, 2004.

Willard India has decided to hold 40 per cent stake in the jute and sugar companies and 100 per cent in the financial firm. The remaining 60 per cent stake in the two companies will be distributed among the minority shareholders.

According to the proposed swap ratio worked out by the company, a shareholder with 100 equity shares of Willard India will get 40 shares of Agauta Sugar & Chemicals, 10 of Chitavalsah Jute Mill and 50 of the restructured Willard India.

Based on this swap ratio, the promoters have also decided to halve the capital base of the holding company, Willard India. "With this restructuring, we feel that the shareholders' value will be unlocked and greatly enhanced," a senior company official said.

Both Agauta Sugar and Chitavalsah Jute Mill will be converted into public limited companies and their shares will be listed on the Bombay Stock Exchange once the demerger and amalgamation schemes are approved by the Allahabad High Court.

Currently, Willard India's sugar mill is located at Bulandsahar in Uttar Pradesh with a capacity of 3,500 tonnes crushed per day.

The jute unit, which even now is known as Chitavalsah Jute Mill, is based in Andhra Pradesh and has a capacity of 35,500 tonnes per annum.

Valuation of the two units, and, based on it, the subsequent swap ratio, has been worked out by Deloitte Haskins & Sells and the Kolkata-based legal firm, Khaitan & Co.

In the first 12 months of operations, which will end on September 30, Willard India is expecting a turnover of around Rs 100 crore from the sugar firm and Rs 75-80 crore from the jute unit. For the year ended March 31, 2004, Willard India's net sales were Rs 106.17 crore against Rs 129.58 crore in the previous year. Net loss of the company dropped to Rs 3.96 crore (Rs 4.15 crore).

The company recently succeeded in restructuring its debt, which has been approved by a CDR (corporate debt restructuring) scheme. All major creditors except UTI have also accepted the terms of the restructured debt.

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