Reconstituted Escorts Board

NEW DELHI: After resignation of all the directors of Escorts Ltd, except Rajan Nanda, from its board on Wednesday, the troubled tractor maker has reconstituted its board on Thursday. Nanda���s son Nikhil Nanda, who resigned on Wednesday, has been appointed as COO of the company.Four new directors, former UTI chairman SA Dave, former union ministers MGK Menon, PS Pritam and SC Bhargava have joined as directors on board. Dave and Menon had resigned from board on August 31 and August 29 respectively.According to a source, the company has defaulted on repayment of debentures worth Rs 50 crore to ICICI Bank. If the directors continue to be on board for one year during the course of default, they can not continue on board of other companies. To avoid this, the source said they resigned from the board of Escorts.Escorts had announced in 2004 that it would raise Rs 800 crore from abroad. The money was supposed to come by August 2005. But, a company source said the infusion of the fresh capital has been delayed, which resulted into the default.Escorts is also facing problem of working capital as the banks have stopped lending it fresh money. The source said the company would require at least Rs 500 crore in the next six months. Rajan Nanda said the company was in the final stage of negotiations for financial restructuring, which will ensure injection of funds and replacement of high cost debt. Escorts posted a net loss of Rs 57.3 crore in the quarter ending June.

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