LML in Rs 575-crore restructuring, to up capacity

Two-wheeler maker, LML has undergone a financial restructuring of Rs 575 crore and plans to self-finance all its activities.

Deepak Singhania, managing director, LML told the shareholders at the annual general meeting of the company that they plan to increase their capacity to 7,20,000 two wheelers but do not need more finances.

He said while financial restructuring, they were able to reduce their debt burden from Rs 300 crore to Rs 100 crore, with the provision that the amount be paid back in the next eight years with an interest payment of 6.5 per cent.

Another Rs 145 crore was mobilised through foreign currency convertible bonds and equity warrants.

At present, the working capital resources are of Rs 80 crore. The payments to suppliers of around Rs 35 crore, has also been restructured.

The company had launched its 150 CC, CRD 100 motorcycle and by next month it will be launched in other states as well. He said the product pipeline of the company was extremely robust. He was also optimistic about the company's exports.

Speaking to Business Standard he said the daily production of motorcycles was 340 per day and will reach about 650-700 motorcycles a day in the next few months. Scooter production is being maintained at 200 units, half of which is being exported.

However, these are 2-stroke scooters and not 4-stroke which are more popular. Singhania said LML will launch its 4-stroke scooter next year.

Some major write offs may also be in the offing .The auditors report said Rs 945 lakhs is to be realised from the sale proceeds of Esslon Synthetics, owned by the former managing director of the company, Sitaram Singhania, eldest of the Singhania brothers. Sitaram Singhania owes another Rs 12 lakhs to the company and the matter is sub-judice.

Another company, Vespa Car Company Ltd, also owes Rs 14.92 crore to the company but since it never went into production, the amount is not likely to be recovered. The management of both the companies is the same.