NEW DELHI : Electrolux Kelvinator is in financial trouble. As of now, accumulated losses have exceeded the net worth of the company.
However, terming this as temporary but painful phase, company MD Rajeev Karwal expressed confidence that it has already prepared a turnaround strategy and will be able to put the losses in deep freeze within the next one year.
“Most of the accumulated losses have been on account of the costs that we had to bear from revamping exercise at the Indian plant. But our operating results are very positive and we are confident of coming back into the black by 2005,” Karwal said.
Electrolux Kelvinator, Indian arm of AB Electrolux, is undertaking belt-tightening exercise, under which staff strength has already been reduced from 3,600 to 2,149. “We will be taking off another 400 employees from Warora plant shortly. With these efforts and the new launches planned for the year ahead, we expect to wipe out all our losses soon.”
The firm is also expecting a fresh infusion of capital from its parent firm through a proposed Rs 200 crore rights issue. “We are waiting for the Sebi nod for the rights issue. AB Electrolux has committed to support the rights issue by subscribing to the unsubscribed portion of the offer beyond their entitlement in the event of other shareholders not subscribing to their entitlement,” Karwal said.
>From The Times Of India