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Our Bureau

Chennai , June 8

SPEL Semiconductor Ltd, an associate of SPIC Ltd., hopes to expand operations after its turnaround last year.

According to Vice-Chairman, Mr Ar Rm Arun, the integrated circuit assembling and testing company has paid off its debts and is looking at opportunities for growth.

During the year the company hopes to raise over $10 million either through debt or convertible option to double its capacity of 15 million units a month.

The company has addressed issues that affected its growth. These were: debts of Rs 15 crore, accumulated losses of Rs 15 crore and dependence on a single customer, he said.

Most of the loans have been repaid through internal generation and the company owes less than Rs 2 crore now, which will be paid off in 2-3 months.

Its accumulated losses of Rs 15 crore in 2003 — the company made a profit in 2004 — will be cleared by the end of the current financial year. The company has scrapped its plans to set up a magnetic media production unit and has, instead, decided to focus on making ICs, he said.

Unsecured loans from the promoter company have also been converted to equity, Mr Arun said.

The company has also expanded its customer base, which is now around 15 and is set to grow.

Driven by an upswing in the demand for semiconductors, SPEL, which made about 258 million units in 11 years between 1990 and 2000, has produced an almost equal number between 2001 - 04 and hopes to match that production in the next two years.

The company has reported a net loss of Rs 3.2 crore on sales of Rs 10.4 crore for the quarter ended March 31, 2005.

During the corresponding period in the previous year the company reported a net profit of Rs 1.4 crore on sales of Rs 8 crore.

For the year ended March 31, 2005, the company reported a net profit of Rs 1.4 crore (Rs 43 lakh) on sales of Rs 36.3 crore (Rs 25.9 crore).

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