The Hindu Business Line : NTPC may pick up 49 pc equity in TELK

The National Thermal Power Corporation (NTPC) is likely to pick up 49 per cent equity in the State-owned Transformers and Electricals Kerala Ltd (TELK).

This will mean the Kerala Government will retain the controlling stake in the company.

According to officials in the Industries Department, SBI Caps is conducting a valuation study of the company to arrive at the amount that NTPC will have to bring in as equity.

This apart, the central PSU will also chip in funds by way of loans to streamline the operations of TELK, including higher capacity utilisation.

The total funds infusion by NTPC is expected to be around Rs 150 crore. But this would be deployed in phases over a period of time.

The immediate task before NTPC is replacing transformers and allied equipment at its various facilities and this is sought to be met from the existing manufacturing facility at TELK.

The other pressing task of technology upgradation is expected to be taken up at a later stage.

TELK, which started operations in 1963 as a joint venture of the State Government, Kerala State Industrial Development of Corporation and Hitachi of Japan, is engaged in the manufacture of heavy electrical equipment, mainly transformers.

The company has facilities for production of transformers ranging from 66 kV to 420 kV.

However, TELK fell on bad days from 1982 when it incurred heavy loss. The company's woes arose from recession, heavy competition, cost overrun of gas circuit breaker project and consequent production loss. The expiry of agreement with Hitachi and subsequent lag on the research and development front came in the way of the much-needed technology upgradation of the company.

With the networth turning negative, TELK was referred to the Board for Industrial and Financial Reconstruction in 1996. As per the latest estimates, the company had accumulated losses of around Rs 50 crore.

Despite all these, TELK is on the path of a turnaround. The turnover of the company has gone up to around Rs 100 crore and it has been registering operating profits during the last four years.

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