McNally Sayaji becomes subsidiary of McNally Bharat

Kolkata: The board of directors of McNally Bharat Engineering Company, approved a scheme of arrangement for reconstruction of the company and McNally Sayaji Engineering Ltd.

With this, McNally Sayaji becomes a 87.33 per cent subsidiary of McNally Bharat whose products division comprising four units, two at Kumardhubi (Jharkhand) and one each at Asansol (West Bengal) and Bangalore, get transferred to the subsidiary with retrospective effect from April 1, 2008. Together with its Baroda unit, McNally Sayaji will henceforth have five units.

Giving this information to newspersons, Mr Deepak Khaitan, Chairman of McNally Bharat, said the McNally Bharat’s stake in McNally Sayaji would be brought down in next six to 12 months. “We’ve to infuse capital into McNally Sayaji and we’re examining various options as to how to do it but nothing has been finalised as yet,” Mr Khaitan observed.

He sounded bullish about the prospects of both McNally Bharat and McNally Sayaji. By 2014-15, the turnover of McNally Bharat, which from now on would concentrate only on turnkey projects, would rise to Rs 5000 crore and that of McNally Sayaji to Rs 1,000 crore.

Right now, as he pointed out, McNally Bharat had orders worth about Rs 2,400 crore in hand, with another Rs 1,000 crore in the pipeline. At least, 10 to 15 per cent of these orders (in value terms) would go to McNally Sayaji which would also add substantially on its own to its business because of the improved products proposed to be launched.

Last year, McNally Bharat’s turnover amounted to Rs 550 crore, likely to reach the level of Rs 1,000 crore in 2008-09. Similarly, McNally Sayaji’s turnover too would rise to more than Rs 200 crore in the current fiscal. Last year, Sayaji was a separate company, having a turnover of Rs 60 crore and McNally Bharat’s products division’s turnover amounted to Rs 80 crore.

The scheme of arrangement is subject to approval of the Calcutta High Court. In consideration of transfer of the products division, McNally Sayaji will issue and allot to McNally Bharat 34.55 lakh equity shares of Rs 10 each, credited at fully paid-up in McNally Sayaji.

The new arrangement would add value to all the stakeholders of both the companies, Mr Khaitan added.