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Business News/ Industry / Manufacturing/  Kesoram Industries may infuse Rs600 crore as capex
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Kesoram Industries may infuse Rs600 crore as capex

BK Birla Group flagship firm looks to ramp up businesses in tyre and cement segments amid bid to trim debt by selling assets in non-core sectors

Kesoram Industries Ltd has a total debt of over Rs4,600 crore, including interest accrued, as on 31 March. Photo: Ramesh Pathania/MintPremium
Kesoram Industries Ltd has a total debt of over Rs4,600 crore, including interest accrued, as on 31 March. Photo: Ramesh Pathania/Mint

Kolkata: BK Birla Group flagship company Kesoram Industries Ltd is likely to infuse 600 crore this year towards capital expenditure to scale up its business in tyre and cement segments.

The company, which has sold off some of its assets in non-core businesses, has pared down part of its debt during the current financial year.

The company has a total debt of over 4,600 crore, including interest accrued, as on 31 March.

The firm has received around 3,025 crore as proceeds from sale of its various assets, including Cavendish Industries Limited, Spun Pipes & Foundries and Hindustan Heavy Chemicals, which it had said would be used to retire long-term debt.

Kesoram’s long-term borrowings were around 3,444 crore as on 31 March.

According to chief financial officer and whole-time director of Kesoram, Tridib Kumar Das, the company has brought down its long-term debt to around 2,200 crore. However, the debt-equity ratio continues to be high at 6:1, he said, adding that debt would increase on the back of capital infusion.

Kesoram would invest around 350 crore towards its tyre business at Balasore, Odisha, out of which passenger car radial tyres would need an investment of 300 crore, while the remaining 50 crore would be for two and three-wheelers. The sum is over and above 500 crore, which was booked as working capital.

Das said the commercial production of radial tyres at Balasore would start early next year. Another 250 crore has been earmarked to acquire land for mining around its existing cement plant at Vasavdatta, Karnataka. Though the mines have been allocated to the company, it has to purchase the mining rights. Also a part of the estimated fund would be used to improve upon the injection of fly ash, Das said on the sidelines of the company’s annual general meeting here.

The capital infusion plan could be met partly through equity and debt, though the company is yet to decide whether to opt for equity infusion.

The 97th annual general meeting of the company was chaired by executive vice-chairperson Manjushree Khaitan as chairman Basant Kumar Birla could not attend it due to failing health.

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Published: 28 Jul 2016, 07:50 PM IST
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