Public sector diversified listed company Andrew Yule & Co Ltd has finally initiated the demerger processes for its various divisions. The restructuring process, which was cleared in 2001, has now been started with the company appointing auditors for accounting separation of its engineering and electrical divisions.

“The company has started the process of appointing auditors, which will be a precursor to the demerger of our engineering and electrical divisions,” officials of Andrew Yule told FE.

“The appointed auditors will undertake verification of all the assets and liabilities prior to the segregation, and we expect the entire job to be over within two months from the date of assigning the task,” officials said.

The effort marks the ultimate full or partial disinvestment of these two divisions by bringing in strategic partners. Back in 1999, Andrew Yule demerged its belting division and divested 26% to Phoenix AG of Germany leading to the formation of Phoenix Yule & Co.

Andrew Yule’s engineering division rolls out industrial fans, blowers and air pollution control systems, while its electrical unit produces switchgears and transformers.

Despite getting the restructuring scheme approved by the ministry of heavy industries more than seven years back, the draft rehabilitation scheme was approved by the Board for Restructuring of Public Sector Enterprises (BRPSE) in May last year with a cut off date as on March 31, 2006.

“Under the revival scheme approved by the BRPSE, the company would be trifurcated into three companies. While tea business will be retained with the company, the engineering and electrical divisions will be spun off as 100% subsidiaries,” the company has said in its annual report.

While future of the electrical and engineering sectors appears bright, efforts to divest the twin divisions of Andrew Yule appear difficult owing to the sick tag and poor performance of these two units.

The Board for Industrial and Financial Reconstruction in October 2004 declared the company sick and appointed IDBI as the operating agency.

During 2006-07, the company suffered a loss of Rs 28 crore on a turnover base of Rs 136 crore. Losses touched Rs 7.46 crore during the first quarter of the current fiscal.