Usha Martin’s board reappoints Rajeev Jhawar as managing director for five years
Kolkata: Amid an ongoing feud within the extended family of the promoters of Usha Martin Ltd, the company’s board on Monday decided to reappoint Rajeev Jhawar as the managing director for a period of five years from 19 May.
Last year, lenders of Usha Martin, which produces speciality steel and wire ropes, ousted Jhawar’s cousin Prashant Jhawar as the non-executive chairman and put G.N. Bajpai, former chairman of Life Insurance Corp. of India, at the helm.
The two factions of the extended Jhawar family own around 25.5% stake each of the company. Prashant Jhawar, who is based in London, has moved the Kolkata bench of the National Company Law Tribunal alleging mismanagement of the company by his cousin. He has described his removal as chairman as improper.
On Monday, Usha Martin said its net loss in the December quarter expanded from last year despite a small increase in operating profit because of a jump in interest burden.
In the quarter ended December, the company’s net loss was at Rs111.6 crore compared with Rs109.9 crore in the same period a year ago because of an interest payment of Rs154.7 crore, up from Rs143.9 crore.
The company’s net revenue jumped 21% year-on-year to Rs1,126.8 crore, and operating profit for the quarter at Rs119.4 crore was up 6.3%. Operating margin contracted year-on-year from 12.1% to 10.6%.
On Monday, the company’s shares fell 5.46% on BSE to close at Rs22.50 each in a weak market.
The company’s board has appointed Royal Bank of Canada to advise it on the proposed sale of the wire rope business. The board is of the view that if this division can be sold, Usha Martin will be able to pair down its debts and revive its speciality steel business, said an independent director, who asked not to be named.