CALCUTTA, July 5: Andrew Yule, the diversified public sector outfit, is set to jump back into the blackwith a net profit of around Rs 3 crore for the year to March 31, 1998, from a Rs 20 crore loss in the previous year. The turnaround has come from a significant reduction in interest burden.Sources said an infusion of nearly Rs 39 crore by the government as plan expenditure helped the belting-to-tea company square up most of its principal loans from Life Insurance Corp, Industrial Development Bank of India and Peerless General Finance & Investment Co Ltd.
It is believed that Yule has repaid nearly the entire Rs 10 crore it had borrowed from Peerless. The sources said the mortgage on Yule House, headquarters of Andrew Yule, has been released following the settlement of the dues.
The interest burden is estimated to have come down to around Rs 10 crore from over Rs 20 crore in 1996-97 after a one-time settlement, following which Yule is expected to present a better picture of its annual accounts.
AndrewYule recently spun off its belting unit as a joint venture with Phoenix AG of Germany, as part of a restructuring. To be called Phoenix Yule Belting Ltd, the formalities will be completed by October.
Andrew Yule will hold 26 per cent of the equity, with Phoenix taking the rest. Under the agreement, the venture will make and market steel cord conveyor belts under the existing Yule brand.
The belting division is estimated to have recorded a marginal profit in 1997-98. The tea division is believed to have netted a cash profit of around Rs 13 crore, following the general rise in tea prices in the second quarter of the last fiscal.
The electricals and engineering divisions continued to show substantial losses, around Rs 25 crore for 1997-98. Andrew Yule, in its long-term financial and business restructuring plan, plans to form different joint venture companies for its loss-making divisions.
The electricals and engineering divisions have been perpetually saddled with losses on account of financialconstraints and inadequate order position for pollution control equipment.
Industry sources said the slowdown in industrial production, inadequate investment in core sectors, and sluggish demand had also affected the company. The electricals unit faced poor demand for power transmission and distribution equipment from the state electricity boards, as well as stiff competition from multinationals.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
