The Hindu Business Line : Keltron making big plans

To reach the ambitious target, the company has to reposition itself as a manufacturing and service company with a rich product and service profile and supported by an efficient manpower structure.

Thiruvananthapuram May 11 After having reached a one-time settlement agreement with banks on its liabilities, the public sector Kerala State Electronics Development Corporation (Keltron) is looking forward to achieving a big leap in business over the next five years.

At a review meeting here the other day, presided over by the State Industry Minister, Mr Elamaram Kareem, the management had presented a vision document aimed at taking the turnover of the company to Rs 500 crore by 2011-12 from Rs 132 crore recorded last year.

BRAND VALUE

But the Government wanted a much higher target considering the brand value Keltron had built up over the years, according to sources. Incidentally, Keltron is the first State-promoted electronics development corporation in the country.

To reach the ambitious target, the company has to reposition itself as a manufacturing and service company with a rich product and service profile and supported by an efficient manpower structure. This will require infusion of investment and modern technology, for which the company can seek consultancy from outside.

It was also decided to merge Keltron's four subsidiaries in Kannur into a single company. Similarly, the subsidiary at Kuttipuram in Malappuram district will also be converted into a separate company. Both of them will function under the holding company of Keltron.

DEAL WITH BANKS

Meanwhile, the banks have agreed for a one-time settlement of Keltron's liabilities, which has been put at Rs 57.85 crore after waiving of accumulated interest. The first instalment of Rs 7.85 crore has already been cleared.

The balance amount of Rs 50 crore will be given as deferred payment in four instalments of Rs 12.5 crore each over the next four years. The instalments will carry a simple interest of 6 per cent.

The company has been making operating profits over the last four years and in 2006-07, it posted a profit of Rs 12 crore. Yet the company's net worth has remained negative.

The Government is looking at converting its loans to the company into equity and this will help turn the net worth into positive, the sources said.

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