Deepak Khaitan (left) in Calcutta on Monday. Picture by Kishor Roy Chowdury

Calcutta, April 11: Kilburn Engineering Limited (KEL), a Williamson Magor group company, has decided to sell the land at its existing factory at Bhandup in north Mumbai and relocate the unit.

The new factory will come up at a cost of Rs 18 crore in Maharashtra itself. The company is scouting for land around 10 km from its existing one. Earlier, KEL had sold its Baroda factory to Cryogenics of USA at a consideration of Rs 16 crore.

?The sale proceeds of the Bhandup factory will more than compensate our plans to set up a new one,? KEL chairman Deepak Khaitan said here today. However, he did not spell out the amount to be garnered from selling the eight-acre plot.

KEL will identify an exact location for the new factory by October 2005 and start the plant by October 1, 2007.

KEL, which makes critical equipment and dryers, was referred to the Board for Industrial and Financial Reconstruction in early 2000. A revival package was approved by the board in May 2004.

The package envisages four things ? liquidation of term loans from the sale proceeds of Baroda, reschedulement of remaining term loans, entire waiver of interest dues and conversion of excess bank borrowing into working capital term loan.

Accordingly, the company had written off Rs 49.71 crore on account of interest charges, which helped the company to reduce its losses to Rs 52.19 crore.

The firm is back to the profit regime and for the half-year ended March 31, it has witnessed a profit of Rs 3.74 crore against a loss of Rs 11.58 crore in the corresponding period of the previous year. The earning per share for six months was Rs 5.54 compared with a negative EPS of Rs 8.78 in the previous year.

KEL director Supriyo Mukherjee said, ?Judging the improved trend of profitability and taking into consideration the company?s other plans, we expect to make its net worth positive in two years.?

The company is also exploring possibilities to raise funds to expand its business. ?A decision will be taken in the next quarter. We are looking at all sorts of instruments ? bonds, FCCBs and others,? said Khaitan.

The Khaitans have shed off 9 per cent in KEL one-and-a-half months back as a block deal. Their share has come down to 57 per cent from 66 per cent.

The company expects to achieve a turnover of Rs 45 crore in 2004-05 (ending September 30, 2005) and an export of 40 per cent, managing director Vibhay R. Sinha said.