Pramod Mittal-led firms fail to ride the super cycle

The current commodity super-cycle is pushing India's metal makers to report record margins and realisations in FY21, but some companies continue to flounder.Among those that have not been able to take advantage of the strong demand growth are two listed companies — Pramod Mittal-led Balasore Alloys Ltd and Gontermann Piepers.Balasore Alloys, one of the country’s biggest ferrochrome producers, has seen several top-level exits, including that of the managing director. Several senior executives quit citing non-payment of salary and the non-operational status of the plants as reasons.The company’s managing director, Anil Sureka, recently wrote to the promoter saying he did not wish to continue at the post after the end of his term. “My tenure in the company as a managing director is coming to an end on 16th of April…I will not continue as the director on the board after kindly consider this as my resignation,” he said in an email. The email is available on the BSE website.Several independent directors of the company, too, have left.“The board has become dysfunctional over more than eight months. The trust level between the promoter and the independent directors has touched the bottom due to repeated failure to honour commitments,” said Asish Kumar Bhattacharyya, one of the independent directors.On July 13, 2020, Pramod Mittal had written to all the independent directors saying the company is working on arranging funds.“I am not feeling well as my lungs are not functioning properly. I am sorry for the disappointing affairs in the company. I am very sad about it. We have already talked to the investor and we will infuse ₹225 crore. as per the schedule,” he had said in his letter. “The company will also subscribe to 10% share capital. Please give me 48 hours’ time to recover from my present health. I will have a meeting thereafter.”Other Independent directors Rupanjana De, Sujit Kumar Majumdar, Kashi Prasad Khandelwal and Susil Kumar Pal have also resigned from the board, citing non-infusion of funds by the promoters despite a promise to do so.The company’s five furnaces--with total capacity of 150,000 million tonnes a year--are lying idle after power supply was cut over non-payment of bills.

from Economic Times https://ift.tt/3fJ9psG