EIL mulls Bharat Plates takeover

Engineers India Ltd (EIL) plans to take over the sick public sector unit, Bharat Heavy Plates and Vessels, which is engaged in the engineering procurement and construction business.

"We are in the business of supplying equipment to oil and gas industry and Bharat Plates is in same line of business. We will like to take advantage of synergies between both the companies," a senior EIL executive told Business Standard.

Engineers India carries out engineering procurement and construction work for oil refineries. In addition, it provides consultation for projects related to petrochemicals, oil and gas processing, offshore structures and platforms, fertilisers, metallurgy and power.

The new areas where the company plans to enter include highways and bridges, airports, ports and power projects.

In a recent communication to petroleum ministry, Engineers India said that it would like to take over Bharat Heavy Plates and Vessels and turn it around.

Engineers India's takeover plan would be placed before the Board of Reconstruction of Public Sector Enterprises (BRPSE) for its recommendations.

According to the last available figures in the public enterprises survey, Bharat Heavy Plates incurred a loss of Rs 78.23 crore in 2004-05 and had a negative net worth of Rs 432 crore.

The company's turnover in 2004-05 was Rs 99.10 crore, and the survey said it suffered from lack of orders due to competition from within India and abroad.

During 2004-05, the capacity utilisation at Bharat Heavy Plates was 27.7 per cent. Bharat Heavy Plates is a wholly owned subsidiary of Bharat Yantra Nigam and is engaged in the manufacturing of process plants, cryogenics and combustion systems. It has a single operating unit at Vishakhapatnam.

Engineers India's performance, in contrast, has been on upswing. In the first nine months of 2005-06 (April-December), the company recorded a net profit of Rs 103 crore (Rs 74.66 crore) on net sales of Rs 607.23 crore (Rs 572.21 crore). The central government holds 90.40 per cent stake in the company.