Engineering goods major Jessop & Co Ltd, acquired by Ruia Cotex, is planning another round of financial restructuring to wipe out the entire accumulated loss of Rs 110 crore (Rs 1.10 billion).
The company is also planning to put in place a new facility to roll out state-of-the-art coaches, including those for Metro trains, to enlarge its presence in railway coach manufacturing, Pawan Kumar Ruia, Ruia Group chairman and director of Jessop, said in Kolkata.
"Our existing coach manufacturing facility is quite old. We are looking for foreign collaborators to improve facilities so that we can make coaches for Metro Rail also," he said.
"We are left with an accumulated loss of about Rs 110 crore from Rs 450 crore (Rs 4.50 billion) after the first round of restructuring by the government before giving us possession, including Rs 40 crore (Rs 400 million) West Bengal sales tax liability.
"Another round of restructuring is required to wipe out this loss," Ruia said.
He, however, said it may not be possible to wipe out the entire loss during the current financial year and indicated that a fresh restructuring proposal would be taken up in the next fiscal.
On the sales tax liability, Ruia said there was a moratorium of two years on liability after which it would be payable in eight annual installments.
Ruia said it is also planned to rope in foreign partners for railway track maintenance, infrastructure projects and road management facility for upgrading the existing facilities.
All the proposals, he said, are being considered to create confidence among buyers that Jessop has been revived and it is gearing up to keep its commitments.
"A number of people are still unaware that Jessop is functioning and it is in a position to supply orders," he said
"You are all aware that the capabilities of Jessop have been under-utilised for quite some time in the near past for various reasons and the average monthly turnover stands at below Rs 2 crore (Rs 20 million). Since we took over, the turnover has increased to Rs 5 crore (Rs 50 million) in the first month of operation (September, 2003)," he said.
Ruia said going by the current order strength, a turnover of Rs 60 crore (Rs 600 million) is expected in the current fiscal and Rs 300 crore (Rs 3 billion) during the next three years.
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