Gouri Prasad Goenka has embarked on an evaluation exercise for its companies -- Star Paper Mills, NRC, Stone India, CFCL, Herdillia Unimers, Andhra Cement Co -- to determine whether the group should exit the business or otherwise.
Goenka said it has been decided that the group would exit non-viable businesses and invest in viable ones by expanding them. A study, being done internally, would be completed over the next three-four months.
As a first step, the group would invest Rs 250-300 crore (Rs 2.5-3 billion) in the companies to make them internationally competitive and economically viable.
Goenka added, various combinations and options were being weighed to generate funds. A part of the investment would be by way of debt. Duncans Industries would, however, not be a part of the viability test as the corporate debt restructuring had been approved and the company would run its own course.
Goenka said the restructuring of group companies would be completed over three years.
He explained that he had two options: to make small investments in all companies, or to exit some and make significant investments in core companies.
The group has already finalised expansion plans for some of its companies. For example, in Star Paper, investment of Rs 175 crore has been lined up over three years, which could include an acquisition as well. Goenka said NRC, the nylon tyre cord manufacturer, and Stone India were also being expanded.
Stone India manufactures alternators, air brakes and brake regulators for the Railways as also colour monitors and secondary components for the defence sector.
For Andhra Cements, the company has decided to go for a one time settlement and make it debt free in two months. Thereafter, the company would have to face the acid test by going through the viability exercise.The group has already exited Duncans Gleneagles, a 50:50 joint venture between Duncans Industries and Gleneagles. Further, it sold a 50.08 per cent stake in Herdillia Chemicals to American multinational, Schenectady International.