Not many in this generation will remember the Chennai-based Easun Reyrolle, which was once a leading power transmission components manufacturing company. For nearly two decades, the company had dominated the sector. It had eight subsidiaries, including six step-down subsidiaries, as on March 31, 2019. However, today the company is facing liquidation.

Incorporated in 1974, Easun Reyrolle Ltd (ERL) commenced production at its plant in Hosur in 1980. It was promoted by late K Easwaran; Hari Easwaran and associates, with equity participation of 25 per cent from Reyrolle Parsons, a wholly owned subsidiary of Rolls Royce Engineering, UK. However, Reyrolle Parsons was later acquired by VA TECH, Austria, which was in turn acquired by Siemens. Consequent to the takeover of VA TECH by Siemens, Reyrolle Parsons divested its equity in ERL in June 2007.

ERL made several acquisitions, including NxtPhase T&D Corporation, Canada and a 60 per cent stake in the US-based Switchcraft Group LLC. It also set up a wholly owned investment arm (ERL International Pte Ltd) in Singapore and an international marketing arm (ERL Marketing International FZE) in Sharjah, according to media reports.

The company’s revenue grew from ₹33 crore (net profit of ₹69 lakh) in 2001-02 to ₹263 crore (net profit of ₹45 crore) in fiscal 2009-10. However, this reversed in the next 10 years with revenue declining to ₹88 crore (net loss of ₹10 crore) in 2018-19, according to the company’s annual reports.

The company was unable to meet its target due to slow collection from Government sector undertakings, lack of working capital, backlog of orders and delay in execution, said the 2018-19 annual report, which was the last available annual report of the company on the BSE.

Easun Reyrolle’s stock price mirrored the company’s performance. From an all-time high of ₹374.36 on the BSE in January 2008, the stock price reached a low of ₹1.57 on March 2020 and on Thursday closed at ₹3.27, down 4.94 per cent. The above prices are adjusted to stock split in 2007.

In its regulatory filing on October 10, 2020, Easun Reyrolle disclosed ₹271.63 crore as loan including revolving facilities like the cash credit it obtained from banks and financial institutions. In May last year, the National Company Law Tribunal (NCLT), Chennai, had admitted an application filed by State Bank of India and Canara Bank under Section 7 of IBC-2016.

While the NCLT judgment ordering corporate insolvency resolution proceedings against Easun Reyrolle notes that discoms owe the company ₹103 crore, the company’s annual report for 2018-19 shows ₹168.58 crore as ‘trade receivables’, of which ₹136 crore were due for over a month. “Your company has been facing losses for the last five years which is mainly due to its operating cycle getting affected,” the 2018-19 annual report said.

The company’s fate is now in the hands of NCLT.