CHENNAI: South India Corporation Agencies (Sical), a part of the SPIC group, expects its move to hive off non-logistics businesses into three or four wholly owned subsidiaries to help the company to access cheap funds riding on the infrastructure bandwagon.

S. Vasudevan, Managing Director, said that by becoming a pure-play logistics company, Sical would be in an advantageous position to raise both equity and debt at better terms. The non-logistics businesses of the company like building materials, oil palm, plantation, vehicle and spare sales had posed a constraint to the company in getting better interest rates from banks. Since Sical was planning to hive off the non-logistics businesses into wholly owned subsidiaries, the shareholders of the company would "get the best of both worlds,'' he pointed out. The dividend payouts of the subsidiaries would flow into Sical and, hence, should benefit its shareholders, he reasoned.

Though the board of the company had cleared a proposal to raise Rs. 500 crore in the domestic market and another $50 million in the overseas markets, the Managing Director said the modalities were still being worked out. Sical had set up two internal committees to look into the re-organisation of the company and also the capital augmentation programme. Mr. Vasudevan said that the business revamp would be completed by March next year.

The Sical initiative on these fronts could not have come a day soon. An iron ore terminal is coming up at the Ennore Port here. It is being built on the BOT (build, own and transfer) basis with a concession period of 30 years.

The terminal will involve an investment outlay of Rs. 500 crore with an equity component of Rs. 100 crore. Sical is hopeful that it will bag the contract.

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