Nicco Corporation will divest its steel division in favour of Ramsarup Engineering Industries Ltd, subject to necessary approvals.
The board of directors of the company have decided to divest the business on a slump sale basis subject to approval of shareholders, financial institutions, debenture holders and consortium of banks. The move is expected to reduce both the debt of the company as also its losses. Rajive Kaul, chairman of Nicco Corporation, confirmed the development. The divestment will bring in Rs 10 crore.The board has discussed a rationalisation proposal involving the shifting of some machinery and workers from their Kalyani plant, manufacturing telephone cables, to their Shyamnagar cable plant.
Further, the divestment will help in reducing costs in Kalyani where there has been a sharp fall of demand for jelly filled telephone cables made in the Shyamnagar factory. The shift will also augment capacity for manufacture of electron beam irradiated flexible wires at the factory where there exists increasing demand.
The company at its last annual general meeting (AGM) had said that Nicco would exit from steel business once it turns around. The move is in tandem with the group
