Tata Projects in talks with Artson Engg for takeover
Tata Project Ltd is in talks with Artson Engineering, an engineering, procurement and construction (EPC) firm specialising in piping and large diameter tankages, for a takeover.
According to banking sources, immediately after clearance of Artson’s debt package by a consortium of Bank of India, Kotak Mahindra Bank and Dena Bank recently, both the companies have come closer to a final deal. However, no official confirmation was available from the two companies.
It is understood that Tata Project is looking at an acquisition of the controlling stake in the company, which is promoted and run by engineering professionals, who jointly own around 12.78 per cent of the current paid up capital of Rs 9.23 core.
"Tatas will not require more than 40 per cent of the expanded capital — projected to be about Rs 14 crore — to control the Artson board. A couple of present promoters may also continue," said an M&A consultancy firm official. Registered under BIFR, Artson is required to bring in fresh investment too for clearance of the rehabilitation package.
Apart from the engineering expertise and physical assets, Artson’s registration with EIL for EPC contracts, is reckoned as major attractiveness. Tata group sources suggested that for Tata Project’s infrastructure business, encompassing end-to-end solution providing in the areas of oil and water, Artson might be a perfect fit.
The debt-restructuring plan of Artson is estimated to reduce the debt burden from the current figure of Rs 40 crore to Rs 17 crore, banking sources said. It has not been making provisions for interest payment in its accounts since the restructuring plan was before the bankers. The company had reported a small profit first in the quarter to March 31, 2004, after a long loss-making streak. However, from then onward there had been gradual recovery in the company’s operation and financial position.
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