Comments
Australian engineering company UGL Ltd has expressed its intention to exit the 50:50 joint venture with Indian wagon manufacturing company Texmaco Rail & Engineering Ltd.
In a statement to the stock exchanges, Texmaco said UGL “has initiated discussion about the future of the project, including their view to exit from the joint venture”.
It said that in view of downturn in locomotive sale in Australia impacting production throughput volume of UGL, the joint venture facility, “Texmaco UGL Rail Pvt Ltd is starved of orders and not able to operate to its potential”.
UGL has taken an Australian $9.8 million write-down for this joint venture to build coal wagons, which is running at a loss because of poor demand for the wagons. UGL’s Directors’ Report for 2014-15 (to June 30) said the impairment of investment in the joint venture reduced its total investments.
Texmaco said the discussions were on and no decision has yet been reached The UGL-Texmaco joint venture commenced operations at its facility near Kolkata in 2013.
It produced and exported steel loco bogie frames for Kazakhstan and Queensland railways.
This joint facility was set up at an investment of over ₹100 crore to build bogies for the Australian market followed by rail bogie frames and platforms, coal wagons and wagon components, and locomotives for Indian and other Asian markets.
Texmaco Rail’s stock on Monday reacted negatively to the announcement and declined 2.58 per cent to close at ₹109.30 on the BSE.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.