P R E S S R E L E A S E

Jessop comes out of BIFR, plans expansion

Kolkata, 3 May 2006: In an order dated 28 April 2006 Board for Industrial and Financial Reconstruction (BIFR) observed that Jessop & Co Ltd (JCL) ceased to be a sick industrial unit and consequently discharged JCL from the purview of BIFR.

The much-awaited development allows JCL to deploy its resources in a more productive way and with total freedom. JCL will now move ahead with its plans to diversify into new product lines and expand product base to suit the needs of the global market. Commenting on the development, Mr Pawan Kumar Ruia, Chairman, Jessop & Co Ltd said: “Execution of big orders without bank finance has been a huge problem for Jessop. Coming out of BIFR will ease the problems to a great extent as the company can now avail of working capital loans from banks and financial institutions. At this moment Jessop has orders worth more than Rs 100 crore in hand. Things are certainly looking up for Jessop.”

Jessop & Co Ltd was formed in 1788 by the sons of William Jessop, an eminent British engineer. After independence the Brits sold their interest in the company and subsequently JCL was converted into a Public Sector Unit. Unfortunately however, the heavy engineering PSU with capacity to manufacture railway coaches and wagons, road rollers, structural components and cranes and hydraulic equipments suffered heavy losses in the first half of the nineties and as a result came under the purview of BIFR in 1995. By 2002 JCL was burdened with accumulated loss of over Rs 500 crore.

In 2002, Government of India invited bids for reviving the ailing engineering giant and a consortium of companies controlled by Mr Pawan Kumar Ruia emerged as the highest bidder. On 29 August 2003, after a protracted court battle, the management control along with 72% shares of JCL was handed over to the Ruia Group as the strategic partner of Government of India. With the innovative management practices introduced by the Ruia Group JCL turned around and earned a net profit of Rs 4.82 crore in 2004-05, the first full year of operation since the change of management.

After turning Jessop & Co around, the Ruia Group took the much-needed initiative to convert it into a vibrant growth engine by infusing fresh capital. Proceeds from a rights issue amounting Rs 52 crore have already been partly received. As a result the networth of the company has turned positive as on 31 December 2005 by Rs 8.8 crore. On its order dated 28 April 2006 the honourable 2-member bench of BIFR recognised the change in the financial status of JCL and subsequently discharged the company from its purview.

For any clarification, please call Mr Dhrubajyoti Nandi at 2289 4747.
Jessop & Co Ltd
Corporate Office: Ruia Centre 46 Syed Amir Ali Avenue Kolkata 700 017