To take its plans for a strategic alliance to fruition, the Aurangabad-based Nath Seeds has embarked on a restructuring exercise that will see it exit all unrelated businesses and focus on seeds.
The company will hive off its corporate farm and real estate to a separate company or companies and clean up its balance sheet, said Nand Kishor Kagliwal, chairman of the Nath group of companies. It will also consider merging Rs 2 crore tissue culture company Nath Biotechnologies with itself once the latter achieves a critical mass.
The company has been conducting corporate farming and integrated agro processing on 2500 acres of land involving the cultivation of fruits and vegetables which it says does not fit in with the seeds business and hence will be spun off. Similarly real estate which was erstwhile agricultural land and valued at Rs 18-20 crore will also be hived off, Kagliwal said.
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The company is owed Rs 9 crore in debt by an associate company in the paper business which will be taken care of, he said.
"We expect to get the new structure in place in a year's time," Kagliwal told Business Standard in an interview. Kagliwal is being advised by the Calcutta-based merchant banker Lodha Capital Markets.
The company is willing to offer around 26 per cent stake to a strategic partner and is in talks with some American companies. "This should be tied up in another six months," he said.
Kagliwal said the company would invest Rs 50 crore - equivalent to its current turnover- over the next three years. This would be in research and development of innovative hybrids, expanding territorial coverage to include the North East and strengthening the marketing and distribution network. The company expects to launch around 10 to 12 hybrid seeds every year.
Exports will be another focus area contributing Rs 5 crore to turnover in 2001. These will be directed to Bangladesh, Pakistan, Vietnam, and South Africa. The company expects total turnover to touch Rs 70 crore in 2001. s