New Delhi, Nov. 1: The ailing DCM Group, which has diversified business interests, today said it will spin off the engineering division to help pay part of its debt burden amounting to Rs 425 crore.
DCM would earn over Rs 100 crore by offloading 74 per cent stake, in the new company DCM Precision Engineering, to private equity investors and financial institutions. The engineering unit, is a key vendor supplier of cylinder heads to Maruti Udyog Ltd and meets 70 per cent of the carmaker’s requirements. However, a strike at DCM since the last two months has severely affected Maruti’s productions.
Vinay Bharat Ram, chairman of the group, said the company would also earn around Rs 225 crore by transferring its real estate rights to DCM Estate and Infrastructure (DEIL). The restructuring process has received the approval of Delhi High Court, he said.
“Once the restructuring process sets in we would be able to pay our entire debt within the next three to four years,” said Sumant Bharat Ram, chief financial officer of the group.