McNally Bharat Engineering, the projects execution entity of the tea-to-dry cells conglomerate Williamson Magor Group (WMG), on Thursday signed an agreement with Turkey’s Kaylon Group to take up infra projects jointly and help chart the revival of the six-decade-old company that began its journey as the local unit of McNally Pittsburg.
The Turkish conglomerate has interests in businesses such as power, infrastructure, railways, and solar energy.
Additionally, two European conglomerates have also shown interest in McNally Bharat, to help expand the struggling company’s mines, mineral, port and steel businesses.
“We hope to sign two separate collaborative agreements with the firms shortly,” an industry source close to the development
Thursday’s arrangement follows McNally Bharat Engineering’s nonbinding financing deal with a consortium of investors led by Hyderabad’s Turbovent Industries.
The investors’ consortium is keen to invest approximately Rs 150 crore or such other amount as may be mutually agreed to between the parties, based on the assessed fund requirements. The proposed capital infusion will, however, be subject to due diligence and approval of the resolution plan from the lenders,” the source added.
When contacted, McNally Bharat Engineering CFO Manoj Digga said the company, in its annual general meeting held on September 26, announced a total turnover of Rs 1,764.10 crore and networth of Rs 532.06 crore for FY 2018-19.
The Kolkata-based engineering group, whose clients included cement makers and energy producers, is seeking to clamber out of financial stress, induced by the lack of investments in the private sector and capacity overhang. Financial crunch also held back the completion of projects.
Besides these initiatives being taken by the company to overcome financial stress, WMG has been approached by various domestic and foreign investors for financial tie-ups. Additionally, several international EPC and infra companies have also shown interest to enter into technology tie-ups.
“Lending institutions have agreed to sign the inter-creditor agreement (ICA) at the last consortium meeting. A majority of the lenders have already signed the ICA. The rest are expected to sign shortly, indicating that the lenders have agreed to resolve the company’s issue outside National Company Law Tribunal within the RBI stipulated timeline,” said Digga.
As of July 31, the company’s total debt (including fund based and non-fund based) stood at approximately Rs 3,000 crore.
Digga reiterated that the company expects to turn around by the end of FY20 if the business sentiment were to improve, the ICA between the company and its lenders signed, and strategic investors infused capital into the company. New Delhi is seeking to increase infrastructure outlays over the next four or five years to help nearly double the size of the economy to $5 trillion.