American Stock Exchange-listed blank cheque firm India Globalization Capital (IGC), that owns stake in infrastructure and materials companies operating in India, has reduced stake in one of the portfolio companies by eliminating a previous debt taken from the firm to focus on its other subsidiary.

IGC has reduced stake in Sricon from 63% to 22% and has said it will look to exit the company in the future while concentrating on its other firm Techni Bharathi Ltd (TBL) where also it owns a majority stake.

The transaction is more of an accounting work. IGC had, in March 2008 bought 63% of Sricon for $30 million and subsequently borrowed approximately $17.9 million from the company. It has now eliminated the debt to Sricon and proportionately reduced ownership in the company.

Post restructuring, IGC’s balance sheet will have total assets of approximately $36 million against total liabilities of approximately $12.5 million including $5.1 million in interest bearing debt. Its book value at the end of the quarter ended December’09 (including the minority interest in Sricon) is approximately $23.5 or about $1.82 per basic share.

Maryland-based IGC has three core businesses: highway and heavy construction, mining & quarrying, and civil construction and engineering.

Ram Mukunda, CEO of Indian Globalization Capital, said in a statement, the plan for next 12 months is to focus on: executing construction business primarily through TBL to increase contracts for infrastructure build-out in India and pursue collection of claims for work done for TBL clients worth $22 million; increasing production from rock quarries and; leveraging shipping hub and logistics for the increasing sale of iron ore mined in India and shipped through its facilities to meet the growing demand in China.

For the third quarter of fiscal year 2010 ended December 31, 2009, IGC had total revenue of $5.9 million compared to $3.8 million in the year ago period (even as the Sricon’s business is not accounted for in the last quarter).

In the same period, IGC reported consolidated net loss of $6.2 million(inclusive of a one-time non-cash charge of $6 million), compared to a consolidated net loss of $2.3 million for the three months ended December 31, 2008.

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