The company which was once owned by the SK Birla group was taken up for revival by the Titagarh Group and the Birlas jointly. The BIFR had sanctioned the scheme of revival for Cimmco in 2010. Pursuant to the Scheme, about 75% of the shares of Cimmco Limited were allotted to Cimco Equity Holding Pvt. L td. - a special purpose vehicle (CEHPL) which was jointly owned by Titagarh and the Birlas, Cimmco's Board had also approved issue of 8% Non Cumulative Redeemable Preference Shares aggregating to the extent of Rs 50 crore by Cimmco Limited to its promoter group entity-Titagarh Wagons Limited on private placement basis- such infusion also approved by Titagarh's Board.
Commenting on this, Umesh Chowdhary, vice chairman and managing director, of the Titagarh group said, "Cimmco's revival involved a substantial and uphill exercise which was carried out satisfactorily and the Company's net worth turned positive thus enabling Cimmco to be discharged from the purview of BIFR in just about nine months following the sanction of rehabilitation scheme by the BIFR in early 2010." However, over the last couple of years, performance of Cimmco has suffered setback mainly due to non-release of Wagons procurement order by Indian Railways- single largest customer and various macro econo mic factors.
It is learnt that the fund raised from the issue would be utilised for general corporate purposes including derisking the business by diversification into related area(s) of operations for which the plant at Bharatpur is fully equipped and also to reduce some higher cost debt of Cimmco. While Cimmco will continue to be a listed company, Titagarh would now have significant ownership of the shareholding of the company. Chowdhary said, "We have a lot of plans for Cimmco and are very confident of making Cimmco a flagship company of the group".via Business - Google News http://ift.tt/1qJaYX7
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