The divestment idea is being contemplated by the company's top brass and may take shape only after a suitable buyer is ascertained, according to sources Although negotiations are yet to begin, the source categorically emphasised that this will not be a distress sale but only a commercial deal. The company's idea to dilute holdings in some engineering companies happens to be in sync with the group's moving out of unfocussed areas altogether.

The group has been identifying non-core areas and taking action in terms of an outright sale or selling off industrial assets, whichever suited the best, over the last two years. Kilburn Engineering, in which the Khaitans hold a majority stake, is outside the group's core business of batteries and tea.

The company, which hasfactories at Bhandup in Maharastra and Baroda in Gujarat, has been facing the onslaught of an ongoing recession in the capital-goods industry.

A drop in a backlog of orders has resulted in under-utilisation of facilities, contributing to losses during 1997-98. In fact, the company had earlier reported that lower order offtake in 1997-98 had lead to a considerable imbalance in working-capital resources as well.

Kilburn Engineering had made a successful entry into alkali systems, but with the caustic-soda industry undergoing a slowdown, prospects appear uncertain.

The company, which primarily manufactures dryers and drying systems, heat-transfer equipment systems, conveying systems, has also developed considerable expertise in project management and construction. It is also engaged in sourcing appropriate technologies for pollution abatement and specialised equipment for power generation.

The Magor group, as part of its restructuring, has yet to conclude the sale of Worthington Pump as a due diligenceis being worked out. On the other hand, its IFL-Hindalco deal has turned murky with a number of issues yet to be sorted out. Magor sources say that it may take some time to decide as to what action can be taken to resolve such differences between the two parties.

Meanwhile, Dewarance McNeill & Co, a Williamson Magor group company, has closed down its operations and offered a voluntary retirement scheme to its 200 employees.

A company source said that Dewarance, which manufactured industrial valves at its Mahestala factory in Calcutta had been in the red for quite some time and was referred to the BIFR. With a turnover of about Rs 10 crore, the company had to face competition from the small-scale sector in the same product range.