The Hindu : Business : Andrew Yule plans to spin off businesses

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Thursday, Dec 20, 2007
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Andrew Yule plans to spin off businesses

Special Correspondent

To divest holdings in three group companies

To retain only tea gardens
Set to come out of BIFR

KOLKATA: Andrew Yule and Company, a public sector undertaking, is planning to spin off its businesses while divesting its holding in three of its group companies, chairman and managing director Kallol Datta said.

Currently the government of India holds 97.56 per cent of the equity of AYCL with the balance being held by the public and financial institutions (FIs).

Addressing a press meet here, Mr. Datta said the company expected to step into the profit zone this year against a Rs. 90-crore net loss in 2006-07. Andrew Yule is set to come out of the Board for Industrial and Financial Reconstruction (BIFR) by 2010-11 around seven years after its listing. By 2008, the company plans to spin off as wholly-owned subsidiaries its engineering and electrical goods businesses while retaining only the tea business. The company has 15 gardens in North Bengal, Darjeeling and Assam. The new companies have already been formed and the aim behind the exercise was to find joint venture partners for them.

Simultaneously, Andrew Yule is planning to divest its holding in some of its group companies which includes Indo-German joint ventures such as Phoenix Yule Ltd. (PYL), Mr. Datta said. Efforts have now been made to appoint consultants for this process.

The divestment in Dishergarh Power, Tidewater Oil and PYL was expected to be completed by next fiscal, Mr. Datta said. He said that these were part of the revival package sanctioned by the BIFR, he said. The package includes total non-cash support of Rs. 491 crore which includes a loan to equity conversion of Rs. 122 crore, a Rs. 111.90-crore bank guarantee, waivers and a Rs. 224-crore write down of equity.

The cash funding of Rs. 151.30 crore under the package would be met through the divestment exercise as well as through a Rs. 20 crore bond issue, Mr. Datta said.

Andrew Yule’s holding in the three group companies proposed to be divested, ranging between 15 per cent and 26 per cent with the remaining being held by the FIs and public (in the case of TideWater Oil and Dishergarh Power).

The revival plan envisages upgradation of existing facilities and modernisation of the tea gardens, repaying creditors and introduction of packet tea as a separate profit centre.

The group’s present turnover is Rs. 1,000 crore with 18,000 employees on its rolls.

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