Financial Daily from THE HINDU group of publications
Sunday, Aug 28, 2005
Financial Daily from THE HINDU group of publications Sunday, Aug 28, 2005 |
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Corporate
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Outlook Railways delay in settling claims hits Jessop cash flow Pratim Ranjan Bose
Kolkata , Aug. 27 DELAY on the part of Indian Railways in revising prices has hit hard Jessop & Co. The engineering major, which was privatised in 2003 and once again began making a net profit in 2004-05, is now facing a cash crunch because of the delay in settling claims against supplies of wagons and coaches made in 2003-04 and 2004-05. The company Chairman, Mr Pawan Ruia, told Business Line that the payments were pending as the Railways was yet to finalise the revised prices. "This has already affected our cash flow situation." He said the total claim was more than Rs 25 crore. Around Rs 6.5 crore is payable to the company for supplies in 2003-04 and the rest for 2004-05. Meanwhile, the company's proposal to buy back the residual 27 per cent stake from the Union Government has been cleared by the Union Finance Ministry and the Law Ministry and is now awaiting appointment of an independent valuer by the Department of Heavy Industries to fix the price for such a block sale. The Centre has already short-listed four firms including Price Waterhouse Coopers, Ernst & Young, KPMG Peat Marwick, Delloite Haskins and Sells to carry out the valuation. Talking about the outlook for the current fiscal, Mr Ruia said the company had sufficient orders in hand and the turnover would cross the Rs 100-crore mark. Jessop ended the last fiscal with a turnover of Rs 77 crore and a net profit of Rs 4.82 crore.
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