CEHPL to invest Rs 300 cr in Cimmco Birla Limited
Cimmco Equity Holding Private Ltd, a SPV set up by Cimmco Birla Limited (CBL) and wagon manufacturer Titagarh Wagons Ltd, has lined up Rs 300 crore for the revival of beleaguered CBL.
The CBL had been under lock out since 2000 following labour unrest. It was later lifted in March last year after the promoters Cimmco Birla Limited signed an agreement with Titagarh Wagons Limited for the revival of Cimmco.
The SPV has so far injected Rs 35 crore in the company towards the wage settlement and refurbishment of the machineries.
CBL executive director J P Gupta told ET that the company has started operations. "The company has shipped its first consignment of a special type single wagon to US based Johnson Industries Inc. We have also started participating in tenders of Indian Railways. Fresh infusion of funds will speed up the restoration work," he said.
Cimmco Birla Limited (CBL), set up in 1957, was a key economic driver in Bharatpur region before 2000. It was a major wagon manufacturer for Indian Railways. The company, started with an initial investment of Rs 81.35 crore, attained a turnover of Rs 230 crore before the company reportedly accumulated losses of Rs 86 crore as against the paid-up equity of Rs 14 crore and reserves of Rs 2 crore in the fiscal year ended June 30, 2001.
Following this, the company was referred to the Board for Industrial and Financial Reconstruction (BIFR). CBL, subsequently, declared a lockout at its plant at Bharatpur in Rajasthan and Delhi following labour unrest. Its banking operations were frozen following cancellation of orders to the tune of Rs 143.88 crore and bank guarantee invoked by Concor amounting to Rs 38.68 crore. "The unit, spread across 200 acres, has a capacity of 5600 vehicular per annum. There were 2619 employees with the company when it was closed down. Now we have done full and final settlement of 2427 employees and recruited 300 fresh hands to carry on our operations," he said.