CG Power and Industrial Solutions, now part of the Rs 41,713 crore Murugappa Group, said on Monday it had achieved a complete financial turnaround in its first full year of operation under new management and had written off debt. net of Rs 650 crore, including that linked to the CG House.
The company said FY22 was a defining year. All the businesses have rebounded and realized their potential, regaining the trust of customers and suppliers, he said in a regulatory filing.
It achieved several milestones such as the highest sales ever recorded by the engine division and the railway division, the highest order booking ever recorded for the transformer division and an order book of Rs 3,686 crore.
CG Power, which was acquired by Tube Investments of India (TII) from Murugappa Group on November 26, 2020, had outstanding debt of Rs 2,161 crore. It has been asked to pay Rs 650 crore upfront to the lenders as part of the restructuring plan. TII also secured a haircut of Rs 1,100 crore in original debt, as part of the acquisition program.
The company had recently used proceeds from the sale of the property and internal accrued liabilities to pay off debt. As of March 31, it had a debt of Rs 302 crore and cash and cash equivalents of Rs 452 crore, it said.
During the third quarter, the company realized `402 crore, including the repayment of the security deposit, by selling land in Kanjurmarg. It also paid off the debt relating to CG House where its head office is located and recovered the property free of any encumbrances. The company also settled obligations relating to guarantees issued by the company to further guarantee loans to its overseas subsidiaries, it said, adding that loss-making subsidiaries have been closed.
For FY22, the company reported a 9% drop in standalone net profit to Rs 627 crore, while sales increased by 104% to Rs 5,159 crore. Free cash flow generated for the year was Rs 392 crore.
For the fourth quarter, net profit fell to Rs 109 crore from Rs 849 crore. Total sales for the period rose to Rs 1,407 crore from Rs 1,022 crore. Free cash flow generated for the quarter was Rs 86 crore. Term debt of Rs 235 crore was prepaid from internal accruals. The company also said it had completed the overhaul and audit of accounts for the five years from FY15 to FY19.