Coal India Ltd’s ailing subsidiaries — Bharat Coking Coal Ltd (BCCL) and Eastern Coalfields Ltd (ECL) — are set to come out of the board for industrial and financial reconstruction (BIFR) ahead of schedule.
While BCCL has made a request to the BIFR chairman in this regard, and is set to come out this year, ECL is expected to make the cut by 2013, much before the revised revival plan projections. These are the only sick subsidiaries.
“We have written to the chairman for coming out of BIFR,” a BCCL official said.
The firm’s net worth was (-) Rs 4,309 crore in 2010, which, according to sources, is down to (-) Rs 2,000 crore.
“Some part of this will be waived by CIL, while the rest of the debt will be converted to equity. Our net profit is also set to cross the Rs 1,000 crore mark from Rs 900 crore last year,” he added. On the other hand, ECL, supposed to come out of BIFR in 2015, might emerge before in 2014. In 2010, the firm had made a record net profit of Rs 962.13 crore, while its networth was (-) Rs 4,900 crore.
“This year, our net profit is set to touch Rs 1500 crore and our negative networth would be around (-)Rs 2000 crore by 2014-15. As per the plan, then CIL would provide a waiver of Rs 500 crore, while the rest of Rs 1500 crore would be converted from debt to equity,” said Niladri Roy, General Manager (technical) of ECL. Roy added that the prime reason for the additional profit was the increased revenue from e-auction coal.
In terms of production, while BCCL is targetting an increase in production from 30.559 million tonne (MT) in 2011-12 to 33 MT this fiscal, ECL too is expecting a rise from 27 MT to 29 MT. This is in tandem with CIL’s overall production target, which is set at 470 MT, compared to 434 MT achieved last year.
Both the subsidiaries were declared sick under were referred to the BIFR in late 1990s. Following nationalisation, BCCL was incorporated in 1972 and ECL in 1975.