Title - Titagarh Wagons to restructure biz segments

Titagarh Wagons Ltd (TWL) has decided to restructure its various business segments, other than wagon manufacturing, into subsidiaries.

It formed a committee of directors on Monday to initiate moves for evaluation of its businesses and making them separate entities. TWL builds railway coach and stell bridges, and makes steel castings and heavy earth moving equipment.

“The board decided to undertake the exercise at its meeting on Monday and mandated the committee of directors to complete it within 90 days”, Mr Umesh Chowdhary, Vice-Chairman and MD, told Business Line.

TWL informed the BSE that the board has in principle decided to restructure the company through an appropriate scheme of restructuring.

DE-MERGER PLANS

TWL currently has five unlisted subsidiaries including overseas entities — Titagarh Wagons AFR, Greysham and Co Pvt Ltd, Titagarh Marine Ltd, Titagarh Singapore Pte Ltd and Titagarh Capital Pvt Ltd. The committee of the directors will appoint consultant and valuer for the proposed restructuring exercise. Based on the professional assessments, TWL is expected to prepare the de-merger plans.

Wagon segment contributed 88 per cent to the company’s FY12 turnover of Rs 644.33 crore and around 80 per cent of the operating profit of around Rs 120 crore.

According to sources, in view of marketability, the steel castings and coach-making businesses are understood to have strong growth potential. It has bagged orders for 12 rakes of MEMU and 11 EMU rakes from the railways. The company has now equipped its manufacturing capability for AC/EMU coaches too. The castings division reported a PBIT of Rs 16.92 crore in 2011-12.

The heavy earth moving machinery and steel bridge segments, however, need strategy refocus, according to the management.