Mittals may revive defunct Ispat Profiles

The Ispat group has decided to revive the defunct group firm, Ispat Profiles. The company, which came under the purview of the Board for Industrial and Financial Reconstruction (BIFR), has been shut for over four years.

P K Mittal, chairman, Ispat Profiles, said at the annual general meeting of the group's flagship company - Ispat Industries, "We are serious about restarting Ispat Profiles. We are trying to sort out pending issues with lenders and hopefully should be able to sort the issues by March 2005."

Ispat Profiles has around Rs 500 crore debt, including interest and related claims. Sources close to the development said the promoters are looking at settling a substantial part of the debt.

"The promoters intend to infuse fresh funds, if required, to put the company back on the rails. The fund infusion may increase the promoters' holding from the present 25.81 per cent," they added.

Ispat Profiles has a 2.5 lakh tonne per annum long products manufacturing facility at Pune. The company was shut in 2000, as it had been severely hit by the industry recession. The company's net worth gradually eroded owing to an adverse market which resulted in lower capacity utilisation and inability to recover fixed costs and overheads.

"There has been a revival in demand for steel profiles in the last few months, especially from the Railways. The surge in demand is one of the reasons which made the promoters consider the revival," sources said.

The company reported a net loss of Rs 44.1 crore, for the quarter ended June 30, 2004. The net loss for the year ended March 31, 2003, stood at Rs 211 crore. The company received permission from the Registrar of Companies, West Bengal, to extend the financial year to September 2004.