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Escorts to bet on core areas

S. Muralidhar

NEW DELHI, July 15

ESCORTS Ltd is restructuring its operations to reduce its total debt burden and consequently the annual interest outgo. The company, strapped with high cost debt, is now proposing to apply funds received from its equity divestment in the erstwhile Yamaha Motors Escorts Ltd (YMEL) to bring down its dependence on loan funds.

Also, as part of its plans to restructure its operations, the company has identified three core businesses that will be its focus areas. These include cellular telephony, healthcare and agri-machinery. To this end, Escorts is open to the possibility of e xiting all other areas, including joint ventures, that are outside these core businesses.

Escorts is strapped with a total debt of Rs 620 crore as at March 2001. While this was down from a total debt of Rs 743 crore as at March 2000, the total interest outgo has actually risen to Rs 60 crore for the year ended March 2001, as compared to Rs 55 crore in the previous year.

The company, which has received about Rs 126 crore from the divestment of its last tranche of 26 per cent in the equity of YMEL, is planning to use these funds to retire a portion of its outstanding loans. Escorts has also drawn up investment plans in tw o of its core businesses.

Speaking to Business Line, Mr Sriram Khattar, Group Head -- Corporate Strategy and Corporate Affairs, Escorts Group, said that the company was expanding its presence in the healthcare segment. ``We want to grow in patient care, particularly cardia c care,'' he said.

Escorts has already been a leader in the cardiac care segment in the Capital, with two of its hospitals here catering to patients with heart ailments. Now, the company is expanding its operations in these two hospitals from a total of 370 beds to about 5 70 beds. The expanded facilities will be completed by March next year.

Mr Khattar also said the company had recently acquired a hospital at Amritsar, in Punjab. The erstwhile Amritsar Hospitals Ltd, is also being renamed Escorts Heart & Super Speciality Hospital Ltd, with specialisation in cardiac care and nephrology.

Escorts has invested Rs 40 crore, with equal amounts in the form of equity and debt. The hospital, which is under construction, will be completed by May 2002 and will have 150 beds, company officials said.

Escorts has also bought land in Jaipur for another 200-bed cardiac speciality hospital. Construction for the same is expected to commence by the year-end. Most of these projects are to be funded through internal accruals and low cost debt, he said.

The company is also studying other areas in healthcare for a possible foray. It may announce plans about related areas within the next six to eight months. Mr Khattar also said that Escorts' group company -- Escosoft, is working towards e-enabling its ot her businesses.