Kolkata: The top priority of B K Birla Group firm Kesoram will be to reduce debt to stay afloat after the demerger of the cement business to Ultratech last year.
At the first AGM after the demise of Kesoram chairman Manjushree Khaitan, CEO and wholetime director P Radhakrishnan said the company will now focus on rayon and transparent paper business that are left with it.The demerger of cement is pending with NCLT.
During the AGM, veteran shareholders like Manoj Gupta asked about the future course of action regarding the company as well as the continuation of Kesoram’s CSR initiatives.
Radhakrishnan said Kesoram now has no operating business but its subsidiary Cygnet Industries has rayon and transparent paper business. Cygnet Industry has a debt of Rs 220 crore. “Our priority is to reduce debt,” he added.
Cygnet has signed an agreement with Futumera of Japan for transparent paper business as well. According to Radhakrishnan, rayon and transparent paper business taken together has a turnover of Rs 300 crore and the potential to go up to Rs 500-600 crore.
Last Nov, Kesoram had decided to demerge its cement business and merge it with UltraTech, the country’s largest cement producer, through a share-swap deal. The board of directors of UltraTech, led by Kumar Mangalam Birla, considered Kesoram’s proposal and approved a scheme of arrangement between Kesoram, UltraTech and their respective shareholders and creditors. The enterprise value of the deal was estimated at Rs 7,600 crore, encompassing both equity and debt.