The Hindu Business Line : Texmaco merging biz ventures

Kolkata, July 26 Texmaco Ltd, a heavy engineering company of the K K Birla stable, is consolidating some of its diversified business interests through mergers. The exercise will also strengthen its balance sheet and improve earnings.

The Texmaco board last week decided to merge Neora Hydro Ltd – a mini power joint venture, Shree Export House Ltd – a wholly owned investment vehicle, and Evershine Merchants Pvt Ltd, a real estate property owning 100 per cent sub-subsidiary, with the company.

Mr S.K. Poddar, Executive Vice-Chairman, however, categorically told Business Line that the company did not have any plan to stray into any new business areas.

The company, which has entered into power generation, according to him is an exception.

He said Texmaco did not want to spawn a separate business segment for power generation and would continue to focus on its related business of hydro-mechanical equipment and structural.

Rental income

Evershine, which owns a fully rented out property in Gurgaon in Haryana, comprising around 66,500 sq ft area, earns an annual rental of Rs 9 crore.

A senior Texmaco official told Business Line that after annual revision of rent under agreements with the tenants, the rent receivable would go up to Rs 10 next year.

The unlisted investment subsidiary Shree Export House would add quoted and unquoted investments to Texmaco’s existing investments.

Shree Exports has equity investments in Texmaco, Chambal Fertiliser, Upper Ganges Sugar, New India Sugar, Zuari Industries and Macfarlane & Co.

The market value of these investments is over Rs 7 crore, much above the aggregate book value as on March 31, 2007. It has also invested in a few unquoted group companies involved in disparate businesses such as construction, rice milling and communications.

In the joint venture Neora Hydro, Texmaco holds 50 per cent paid up capital, while a number of group companies hold the balance. The company official said that the valuation exercise would begin soon for ascertaining the swap ratio and by December 31, the exercise of seeking approvals from the stock exchange, the shareholders and the High Courts should be through.

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