TELK sees tie-up with NTPC as lifeline

Transformers and Electricals Kerala Limited (TELK), the state-owned public sector company, will soon enter into a strategic tie up with the National Thermal Power Corporation (NTPC) in order to set up a world-class transformer manufacturing facility.

A top official of the company told Business Standard that three rounds of preliminary discussions were held with NTPC and a memorandum of understanding would be signed soon.

"We have not worked out the details of the new joint venture. NTPC will have a major stake in the new venture," he disclosed.

The Kerala government has given its green signal to the new venture as it is very keen to bail out the ailing public sector company, which commenced operations in 1963.

The new venture will be part of the revitalising package of TELK ,which has been in the red since 1991. The company has also held discussions with Bharat Heavy Electricals Limited (BHEL) for a strategic alliance and is now determined to wipe out the accumulated losses, which runs into Rs 45 crore.

The official said TELK had targeted a profit of Rs 10 crore in 2006-07 on a total turnover of Rs 132 crore. If the profit crosses the Rs 9-crore mark in the current fiscal, networth of the company will be positive and the ailing firm will be taken off the list of the Board of Industrial and Financial Reconstruction (BIFR).

In 2005-06, TELK had a working profit of Rs 3 crore at a total turnover of Rs 109 crore.

The company earned an export income of Rs 30 crore and is eyeing Rs 35 crore in the current year. Though TELK has a total order of Rs 160 crore at present, it is hampered by lack of technology upgradation.

The strategic tie-up with NTPC could be a long-standing solution to the issue as there is no dearth of market for the products of TELK.

The company, which is based at Angamally near Kochi, has 1,000 employees. It was referred to BIFR in 1991 as the total loss accumulated to the tune of Rs 65 crore.