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Titagarh Wagons Ltd on Monday said it has decided to exit from France-based Arbel Fauvet Rail (AFR), the company’s first overseas acquisition.
The Kolkata-headquartered company had acquired AFR, a railway rolling stock maker, for ₹11.7 crore in 2010.
Vice-Chairman and MD Umesh Chowdhary told PTI that, “we have resolved to move out from AFR, as it was making losses of 4-5 million euros annually for the last three years, due to a general slowdown, and it required more capital. Also, we decided to pump in funds where growth lies.”
The company had invested over ₹100 crore in the French subsidiary.
A commercial court in Paris had earlier this month ordered the liquidation of AFR.
Meanwhile, India Rating placed Titagarh Wagons’ rating under watch, and said it believes that any cash outflow on account of the liquidation may impact its financial profile.
Chowdhary said the company would look to focus more on its metro coach segment, which needs better management and financial bandwidth.
He said the company has received orders worth 216 million euros for metro coaches from Italy, and nearly ₹1,200 crore for aluminium coaches from Pune Metro.
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