Pricol will eliminate its net debt by 2023: MD
Chennai: Coimbatore-based major Pricol, which has sold loss-making foreign subsidiaries and written off Rs 400 crore, plans to become debt free in the next 2 years.
The company currently has approximately Rs 235 crore in debt on its books and no major investment is planned for the next couple of years.
Pricol’s promoter family also worked out a settlement and restructuring of the stake among family members by transferring all group businesses under a holding company, said Pricol MD Vikram Mohan. “We have reached a settlement within the family, including the reorganization of the shareholding of all group companies,” said Vikram Mohan. “My brother was never involved in the business and I bought his shares. We have transferred all group businesses into a holding company structure and my wife and I will be involved in the business through both ownership and management,” he added. Besides Pricol, other companies in the group were founded by Vikram Mohan, but family members held shares “which have now been settled”, he said. Apart from the flagship components company, the Pricol Group also owns hospitality, business and leisure travel, freight and real estate businesses. The company had recently seen some share transfers between family members of the promoter as part of “balancing the personal books”, he said. “I had arranged funds for family members to subscribe to the rights issue and these shares have now been offered to me,” he explained. The family settlement comes at a time when Pricol is also cleaning up its books. Apart from a small profitable Indonesian unit and the central purchasing office based in Singapore, Pricol has left all loss-making foreign subsidiaries.
With around Rs 300 crore capex already spent in the last 2 years and new products and two new factories in operation, there will not be any big capital expenditures ahead. Pricol is also entering new segments, including refocusing on passenger vehicles now that the non-competition clause with Johnson Controls and Denso has ended. “We are at 75% capacity utilization and have increased our market share and added new products, which is why our revenue increased by 40% during QFY21,” Mohan said. However, Pricol can now only produce 85% of its demand due to a pronounced global shortage of integrated circuits.