The logistics company needs around Rs 120 crore to revive the operations and restructure debt, Prabal Basu said
Balmer Lawrie & Co, the diversified PSU conglomerate, is planning to divest stake including management participation in Transafe Services in a bid to revive the fortunes of its joint venture logistics arm.
"We can go for up to 50% dilution in equity. A logistics company which wants to partner with us and which could be in the management would also be preferred. With active management participation by both of us we can together grow the company," Prabal Basu, chairman and managing director, Balmer Lawrie, told DNA Money.
Balmer Lawrie, a mini-Ratna Category–I public-sector entity with diversified business portfolios, is known more for its monopoly hold over ticketing services for government staff and bureaucrats.
Transafe, which is into the business of specialty container manufacturing and logistics services, was jointly promoted in 1990 by erstwhile state-owned entities like ICICI, SCICI, UTI, TDICI along with Balmer Lawrie.
At a later stage, about 71% in Transafe was being held by ICICI Ventures, which made an unceremonious exit in 2009 under the shadows of financial irregularities, and since then Balmer Lawrie has been holding 50% in Transafe and the remaining is held by its joint-venture entity Balmer Lawrie-Van Leer.
"Transafe, which had gone into some issues about a decade back, need some debt restructuring for which we are looking for partners. There are also accumulated losses of around Rs 55 crore while debt is around Rs 130 crore. There is a need to bring down the debt level also through fund infusion by the partner. The company need around Rs 120 crore to revive the operations and restructure debt," Basu said.
The financial health of Transafe makes attracting an outside investor a difficult task but Basu is confident of a better future for its arm.
"While the business suffers losses at the net level and accumulated losses are high, the company is earning cash profits. There are definitely opportunities for growth in the logistics sector but fund constraints and interest burden, which is eating away profits, are restricting it. We need a partner for these reasons," he said.
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