Ruia Group acquires HIWL, IRML from Orissa
Continuing with its strategy of picking up ailing units, the city-based Ruia group has taken over two sick public sector undertakings under Orissa government.
By PTI |
KOLKATA: Continuing with its strategy of picking up ailing units, the city-based Ruia group has taken over two sick public sector undertakings under Orissa government.
Announcing the deal, Pawan Kumar Ruia, the chairman of group, said that they have taken over the two state-owned enterprises; Hirakud Industrial Works Ltd (HIWL) and IDCOL Rolling Mills Ltd (IRML).
"We have finally acquired 100 per cent in HIWL and IRML from the Orissa government after several years of hurdles," Ruia said.
The Group paid Rs 22 crore for HIWL in the form of purchasing shares and squaring off liabilities while it paid Rs 9 crore for IRML.
The company would require additional Rs 35-40 crore to meet further liabilities over and above Rs 22 crore, he said.
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The Ruia Group had earlier bought ailing PSU engineering giant, Jessop and Company, and the entire tyre business of Chhabrias which included three companies including the sick Dunlop India Limited.Hirakud, employing about 400 workers, is engaged in designing, fabricating and erecting wide range of towers and structures with a total installed capacity of 11,000 TPA.
While, IDCOL is a closed rolling mill and spread over 82 acre of land at Sambalpur and next to HIWL.
Ruia said both the companies have synergies with Jessop, which is engaged in wagon manufacturing and other engineering projects and expressed hope that HIWL would be able to touch a turnover of Rs 200 crore by 2007-08 with the infusion of Rs 40-50 crore as working capital.
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Ruia said that he would introduce a VRS to reduce the workforce as nearly 200 workers were surplus in HIWL.He said HIWL, IDCOL and Jessop had a lot of synergies between each other and the group would draw operational strategy that would offer forward and backward integration for the group.
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"We may install a new wagon-making unit at newly acquired Hirakud facility being the wagon demand from the government is increasing very fast," Ruia said.The group would focus in sugar, engineering and infrastructure sectors. The group would invest around Rs 750 crore for its group companies.
The group would invest Rs 250 crore in sugar, Rs 400 crore in Dunlop and Rs 50 crore in Hirakund.
"We want to expand Kamlapur sugar unit at UP from 4,000 tcd to 20,000 tcd in three years and increase the power plant by 19 MW that would require an investment of Rs 250 crore, Ruia said, unfolding its sugar business strategy.
"We would look at both organic and inorganic form of growth. Takeover offers capacity building quicker. But, the company is waiting for a right opportunity," he said adding that the company is serious about starting a ethanol project.
Ruia said for its engineering firms the group was contemplating to form a holding company for all engineering units. But, there is no plan to merge the companies.
Meanwhile, Ruia said the company which had applied before the government for buying out the remaining four per cent in Jessop & Co was yet to get government's final nod.
"In August, the three years will be completed and then government has to sell off its remaining stake to us as per the agreement signed for divestment," Ruia said.
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