The decision on divestment of Balmer Lawrie & Co Ltd (BLCL) may be expected next week. "We have received in principal approval for divestment and will be taking a decision next week," explained chairman of BLCL, S N Mathur, while speaking to reporters at the 84th annual general meeting here today.
The department of divestment is also taking necessary action for transferring the stake held by IBP Ltd in Balmer Lawrie to Balmer Lawrie Finance Ltd. IBP holds close to 60 per cent in BLCL.
The process is awaiting clearance from the Registrar of Companies (RoC). With the process of share transfer completed, BLCL will emerge a separate company and will cease to be IBP's subsidiary.
The process of separation of BLCL from IBP will however act as a deterrent in the value that BLCL will garner once it is ceases to be an IBP subsidiary.
BLCL had appointed ANZ Grindlays (now Standard Chartered Grindlays) as an independent valuer for the company. While BLCL's valuation as IBP subsidiary has been estimated at Rs 500 crore, the valuation on a standalone basis will be less since the synergy between both the companies will no longer exist when separated.
BLCL declared a reduced 15 per cent dividend against 25 per cent last year. Nevertheless, the company registered a 6.5 per cent growth in turnover which was contributed by a significant increase in turnover of project engineering and consultancy by about 26 per cent, followed by service business which grew over 15 per cent and manufacturing businesses which grew around five per cent.
There was, however, a sharp decline in turnover of trading goods by 62 per cent coupled with reduction of other income at 14 per cent. Gross profit for the year stood at Rs 185.26 crore against Rs 180.20 crore in the previous year.
Operating profit at BLCL was Rs 32.18 crore against Rs 28.82 crore, while it recorded a 57 per cent decline in profit before tax mainly for one time set off of Rs 9.31 crore made against PBT for the year and impact of deferred revenue expenditure for Rs 6.04 crore.
