CALCUTTA, February 19: GEC Alsthom India Ltd, the Rs 525-crore manufacturer of industrial power transmission and distribution equipment, has begun a due diligence exercise and is likely to decide on a new name for itself within the next few days. The company is expected to call an extraordinary general meeting to have its new name ratified by the shareholders.The Indian company's move follows a decision last year by parent GEC Alsthom to float the 50:50 venture between GEC plc of the UK and Alsthom of France, with the two companies holding 24 per cent each, and the public 52 per cent.
The status of the present due diligence exercise is not known here as top officials including managing director K K Moradian are in Chennai.
The new name of the Indian operations is being kept a highly-guarded secret.The Delhi-based official spokesperson was out of station. The first pointer to the change in management was last month's decision by R K Daga to quit as chairman and managing director of GEC Alsthom India. Hewas replaced by the 43-year old Moradian, a former executive director for finance.
Official sources had disclosed earlier that there will be changes in the present management structure of the company, following the new equations worldwide between the two partners.
GEC Alsthom NV holds a 66.49 per cent stake in GEC Alsthom India Ltd. The financial institutions hold a stake of 13.04 per cent between them while a former CMD, A Khosla, holds 0.44 per cent. Khosla is now with the Bhadrawati power project of Mittal-owned Ispat Group.
The company has been looking at viable options to develop business, enter into strategic alliances and form joint ventures. It has been a major supplier of power transmission and distribution equipment to the state electricity boards. GEC is also involved in the Bhadrawati project.
GEC Alsthom India reported a turnover of Rs 525.11 crore for the 12-month accounting period ending on March 31, 1997, up from Rs 465.59 crore in 1995-96. Profits dipped from Rs 14.99 crore in 1995-96to Rs 11.27 crore in 1996-97.
The company recorded an operating loss during the first six months of the current financial year to September 30, 1997. It had to sell its Chennai property to show a net profit of Rs 2.38 crore after extraordinary items.
In 1994-95, GEC sold Magnet House, a prime property located in the heart of Calcutta. In 1993-94, the company sold a chunk of its investments in Hill Properties Ltd, Indian Transformer Ltd, East India Clinic Ltd, English Electric Company Employee's Co-operative Stores Ltd, Sholapur Spinning & Weaving Company Ltd and Unit 64 scheme of the Unit Trust of India.
Due to the restructuring of the stake worldwide, the shareholding pattern will undergo a significant change in India also. After the due diligence exercise is completed, the company will have its name ratified by its shareholders.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
