Pennar achieves turn-around, to hit dividend list in 2 yrs: N Rao

Mumbai, Sept 27 (UNI) Pennar Industries today announced their achievement of a turn-around with a marked jump in sales and profit.

Briefing newspersons here, Pennar Industries' Executive Chairman Nrupendar Rao ascribed the turnaround of the company to a three-pronged strategy of business restructuring, financial restructuring and all round productivity improvements.

During the period under review, the company's gross revenues stood at Rs 647.31 crore (for 16-months period) as against Rs 370.07 crore for the previous accounting year's 12 months period ended March 31, 2005.

Replying to a question, Mr Rao said financial restructuring with the induction of Rs 122.4 crore by two foreign investors, Eight Capital of New York and Spinnaker Capital of London, in the form of convertible debentures has helped the company to retire its long-term debt and put the company on a revival path.

Mr Rao explained that the revival path of the company backed by business restructuring strategies and expansion plans have led Pennar, a primarily a cold rolled steel company , to emerge as a producer of value added steel products like cold formed profiles and pressed engineering products including automotive components.

To a related question, Mr Rao said Eight Capital has infused Rs 30 crore and the remaining Rs 92.4 crore by Spinnaker Capital in the Pennar Industries. Both these foreign investors on conversion will be holding about 27 per cent of the equity of Pennar Industries, he informed.

On the issue of dividend, Mr Rao said the company has started making profits and in about two years time, ''it should able to hit the dividend list'' after clearing away the past problems (losses).

Regarding expansion plans, he said Pennar has three manufacturing units of which two are near Hyderabad, at Patancheru and Isnapur and the third at Tarapur in Maharashtra, while it is setting up a fourth facility at Chennai to produce value added steel products and components for the auto sector. The first phase of the Chennai unit is expected to be operational by March 2007, he added.

When asked about capital expenditure plans for the current fiscal, Mr Rao said the company plans to spend about Rs 24 crore of which the bulk of it will go to Chennai unit.

UNI SN WD AW1737