Cimmco Ltd, formerly Cimmco Birla Ltd, has operationally turned around recording a net profit of Rs 12.02 crore in its first full operational quarter (to March 31, 2011) after the Board for Industrial and Financial Reconstruction (BIFR) confirmed its networth positive in December 2010.
Cimmco also restructured its borrowings through a fresh set of arrangements with Arcil, ICICI Bank and Syndicate Bank, which would allow the three institutional creditors voting rights up to 15 per cent in the company, banking sources told Business Line .
These new arrangements have been done through pledging of shares, sources said.
Mr Umesh Chowdhary, nominee Director of Cimmco Equity Holdings Pvt Ltd, the promoter entity, and Vice-Chairman and Managing Director of Cimmco, confirmed the development, but declined to elaborate. According to statutory disclosures by the company, as on March 31, 2011, promoters (S.K. Birla Group and Titagarh Wagons Ltd) had 81 per cent stake and the public holding was placed at 19 per cent in Cimmco.
Assets Reconstruction of Company of India Ltd (Arcil) in September 2008 had bought Cimmco's loans worth around Rs 560 crore from JP Morgan and became the largest creditor of Cimmco, holding 94 per cent of the total secured borrowings of the company.
As part of the BIFR sanctioned rehabilitation scheme, which is now under implementation, ICICI Bank, the other secured creditor, has provided a term loan of Rs 75 crore and a working capital facility Rs 80 crore to Cimmco.
Syndicate Bank has recently made available Rs 30 crore as working capital to the company. The paid-up capital of the company now stands at Rs 20.14 crore.
The earlier incarnation of Cimmco under S.K. Birla group management had reported last profit in 1997-98. Before declared sick in 2002, Cimmco Birla manufacturing facility at Bharatpur in Rajasthan was closed.
The scheme of rehabilitation was sanctioned by the BIFR in March 2010.
The Cimmco stock finished up 10 per cent on the BSE at Rs 115.60 on Wednesday.