NGEF closes semiconductor unit

BANGALORE, MAR 9: NGEF Ltd has closed down its semiconductor division as part of its plans to hive off the ailing units of the company. N...

BANGALORE, MAR 9: NGEF Ltd has closed down its semiconductor division as part of its plans to hive off the ailing units of the company. NGEF has also redeployed its 20 odd workmen from the semiconductor unit to the other divisions of the company.

Confirming this, a top company official said the suspension of activities at the semiconductor unit will not lead into further losses to the company which is already under the net of the Board for Industrial and Financial Reconstruction BIFR.

The addition of 20 employees, who had been shifted from the semiconductor division, will not be an extra burden to the existing units as the state-run company have already implemented a series of voluntary retirement schemes over the last few months.

The company8217;s other divisions for manufacturing transformer, switchgear, rotating machine and power electronics products are currently operational, along with its mechanical engineering division.

Though the company is likely to maintain the last year revenue during thecurrent fiscal as well, it may not reach the set target. 8220;Despite huge discounts offered to many industrial houses on sale of its transformers, the net loss of NGEF is likely to come down by Rs 7 crore to Rs 40.62 crore during the current fiscal. During 1997-98 it had posted a net loss of Rs 47.63 crore,8221; NGEF Ltd managing director Vijay Gore said.

As on February 28, 1999, the company achieved a total income of Rs 141.28 crore. In a bid to push sales in the domestic market the company is offering a discount of 40 to 50 per cent on listed prices of its some items. 8220;In February NGEF had offered around 42.5 per cent discount on its transformers to a customer,8221; Gore said.

NGEF has also decided to venture into the export market. It is eyeing countries like the Middle East, South East Asia and Africa for additional growth. NGEF has also revised its export target to Rs 8 crore from the earlier Rs 4 crore for the current fiscal. It is also planning to forge alliances with foreign firms for exporting itsproducts.

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Regarding the privatisation of NGEF, he said the industry department has already forwarded the company8217;s proposal to convert the debts dues to the state government into equity. 8220;By the end of the month, we were expecting the green signal from the State finance department,8221; he said.

Gore said no new company has entered the race for picking up a controlling stake in NGEF. Leading companies which are already in the race for acquiring a controlling stake are BSES Ltd, ABB Ltd, and Kirloskar Electric Co. The BIFR had already given an in principle8217; approval for divestment of upto 51 per cent equity in the company following a request from SBI Caps, the nodal agency appointed for finding a joint venture partner for NGEF.