Cimmco had primarily been since 1957 in the business of Railway Wagons and Heavy Engineering Projects / Products at Bharatpur (Rajasthan)The Company is a Public Limited company in Private Sector having installed capacity for manufacturing of wagons, coaches, underframe 2240 Vehicular Units (VUs) and Industrial Machinery 14200 MT per annum and comes under a large Industrial Unit.The use of finished products like wagon is made for transportation of freight traffic by Indian Railways across India and close circuit transportation by some Industrial users like Thermal Power Projects. So far as Industrial Machinery is concerned it caters to Greenfield projects as well as replacement requirements in various Industrial segments viz. Cement plant, Fertiliser plant, Chemical plant, Steel plant etc
Cimmco Equity Holding Private Ltd, a special purpose vehicle (SPV) set up by Cimmco Birla Limited (CBL) and wagon manufacturer Titagarh Wagons Ltd, has lined up Rs 300 crore for the revival of beleaguered Cimmco Birla Limited (CBL).The CBL had been under lock out since 2000 following labour unrest. It was later lifted in March last year after the promoters Cimmco Birla Limited signed an agreement with Titagarh Wagons Limited for the revival of Cimmco.
The Scheme:
According to the plan, the S K Birla group and TWL will hold the controlling share of Cimmco through Cimco Equity Holdings Pvt Ltd – equally owned by the two promoters.The sanctioned scheme provides for reduction of share capital and restructuring of secured debts and current liabilities, among others. This will help the company write back its loans to the restructured level and adjust it with accumulated losses, enabling the company to make its net worth positive within a year.After the reduction and consolidation, in place of listed Cimmco Birla's 1,42,60,887 shares of Rs 10 each, the Cimmco Ltd's nine-member board on March 14 issued 28,52,177 shares of Rs 10 each to the shareholders whose names appear in the register as on March 12.The board issued 162,88,923 shares of Rs 10 each at a premium of Rs 19.77 per share to Cimco Equity Holdings Pvt Ltd. The paid-up capital of the company is now Rs 19,14,11,000,
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Cimmco looks beyond wagon making
Cimmco Ltd, a wagon maker for Indian Railways, is contemplating going beyond its sole line of business in a bid to de risk its revenues under the management of its new owners, the Chowdharys of the Titagarh Wagons.
Providing engineering services to the power sector, manufacturing components for Railways and even building steel bridges are some of the areas being sought by the new management, Umesh Chowdhary, vice-chairman and managing director of Cimmco told
“We are looking at doing other things apart from wagons as well like making parts of locomotives, bridges and also fabrication work for the power sector including Nuclear Power Corp,” Chowdhary said after the annual general meeting of the company held on Monday in Kolkata, its first in the city after the company’s registered office was shifted from Delhi, post the change in management control.Cimmco, formerly known as Cimmco Birla, was part of the S K Birla Group and one of the premier wagon manufacturing companies till 2000 when its Bharatpur plant in Rajasthan declared a lock-out due to labour unrest, and the company was referred to the Board for Industrial and Financial Reconstruction.In 2008, Titagarh Wagons came in as a new co-promoter to revive the company. With its net worth turning positive in June 2010, the rechristened Cimmco was de registered as a sick company by the Board of Industrial and Financial Reconstruction a year ago.Cimmco last year received an order for 1,700 wagons, giving it a share of 9% of total wagon procurement and Chowdhary is now waiting for new orders to flow in.“The new tender, which was closed in August, is yet to be finalized and we are awaiting its outcome,” he said.Even as it waits for new wagon orders, Cimmco is looking at business opportunities from other sectors.“We have booked orders for various hydro-mechanical units and some other specialized commodities that have partly been executed. We are looking at operational works of Nuclear Power Corp and also the power sector. So there are other areas which we are tapping in order to bring back Cimmco to its full potential,” Chowdhary said.Major capital investments are not currently being contemplated for diversification plans. “We do need to create some manufacturing infrastructure for the kind of work we plan to do but that would be more of balancing equipment in nature.”
The Bharatpur plant, which reopened partially in 2008 after a gap of eight years, has stabilized.“We are churning out up to 220 wagons month, a feat never achieved before. We are constructing a new shed, while we need to build a staff colony,” Chowdhary said.
CURRENTLY STOCK TRADING AT 70-75 LEVELS. WE EXPECT COMPANY MAY POST 12-15 EPS FOR 2012. RAIL BUDGET MAY GIVE BOOST TO THE COMPANY EXPECT 100RSWITH IN NEXT 3 MONTHS TIME WITH LIMITED DOWNSIDE RISK WE RECOMMEND BUY
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