Andrew Yule out of BIFR

Andrew Yule & Co Ltd, a Government of India enterprise, has come out of the purview of the Board for Industrial and Financial Reconstruction (BIFR) after 11 years.

BIFR in its order on July 8 placed the company out of its ambit after resolution of one of two major issues coming in the way. BIFR denied the provident fund authority’s demand of around ₹6 crore on the company. The Board, however, set a date in November for hearing the income tax department’s claim.

Earlier, the company recommended a dividend of 5 per cent for 2014-15, the first after 21 years, with special permission from the BIFR.

It reported a net profit of ₹17.77 crore in 2014-15 against ₹7.04 crore in the previous year. It currently has an accumulated profit of ₹157 crore. Declared sick in 2004, the company achieved positive net worth of ₹224 crore at the end of the 2014-15.

Andrew Yule, which earlier decided to set up a high-capacity greenfield transformer making facility in Tamil Nadu, is now looking at take-over of an existing unit in the State.

“We are in talks with an existing transformer manufacturing company for acquisition of its factory near Chennai,” Kallol Datta, CMD of Andrew Yule said after its AGM.

“If we succeed in taking over the plant, then the plan for setting up a new one will be shelved,” he added.

Andrew Yule has obtained 10 acres of land at Sriperumbudur for the new facility. The company also had plans to sell its five acres of land of its existing facility, which at Perungudi in Chennai. The sale proceeds could fund the proposed Greenfield (1,200 mva to 5,000 mva) project at Sriperumbudur.

However, Andrew Yule is unlikely to sell the land if it goes for the takeover. It may then opt for borrowing to fund the acquisition. Datta indicated that the acquisition cost would be less than ₹150 crore, estimated for setting up the new unit.

Shareholders at the AGM approved company’s borrowing limit at ₹300 crore.

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