The Hindu Business Line : Andrew Yule recast to be completed by 2008-09 end

Kolkata, March 20 The restructuring and rehabilitation exercise of Andrew Yule & Company Ltd is expected to be completed by the end of 2008-09. The company, which was referred to the Board for Industrial & Financial Reconstruction (BIFR) in November 2002 after its net worth was eroded in the year 2001-02, is set to earn profits in the current year itself.

According to Mr Kallol Datta, Chairman & Managing Director of Andrew Yule & Company Ltd, as part of the revival package approved by BIFR, the company would spin off its electrical and engineering businesses into separate companies, while its tea business would be retained under its own banner.

The company would also unlock its investments and bond issues in other companies – including group companies – with a view to generating the cash funding that is required under the revival package.

Divesting equity holdings

Towards this end, Andrew Yule will divest its equity holdings in associate companies such as Phoenix Yule, Tide Water Oil Co (I) Ltd and DPSC Ltd. The company has appointed PricewaterhouseCoopers Ltd to fix the value of Andrew Yule’s 26 per cent equity stake in Phoenix Yule. In all probability, the company’s 26 per cent equity stake in Phoenix Yule will be offloaded in favour of Phoenix, which has the first right of refusal in this regard.

Expressions of Interest will soon be invited for 15 per cent equity stake held by the Andrew Yule Group in DPSC Ltd. The process of appointing a consultant for divestment of Andrew Yule’s 26 per cent equity stake in Tide Water Oil is currently in progress.

Shareholders’ approval has been sought to write down the par value of each equity share of the company from Rs 10 to Rs 2 each with effect from April 1, 2007 with a view to reducing the accumulated loss. As on March 31, 2007, Andrew Yule had an accumulated loss of Rs 410 crore. While losses to the tune of Rs 247 crore would be made up by writing down the value of equity shares, the shortfall would be met by divesting equity holdings in associate companies and other means, Mr Datta said.

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