Tata Engineering (Telco) chairman Ratan Tata has said that the financial restructuring recently undertaken by the company would enhance shareholders' value and enable the company to make a faster come back on the dividend list. The move would reduce the burden on the company and get some savings this year, Mr Tata told shareholders at the extraordinary general meeting (EGM) held in Mumbai on Wednesday. The shareholders at the EGM and the debenture holders at a general meeting, gave their consent to the company's initiative to set off miscellaneous expenditure (to the extent not written off or adjusted), impairment in value of part of its fixed assets lying in capital work in progress and diminution in value of certain financial investments aggregating to Rs 1,180 crore against the balance in the Securities Premium Account (SPA).

The board had approved the proposal on February 20, 2002. The company will now seek the confirmation of the High Court, Mumbai to give effect to the scheme of restructuring, in accordance with Section 78 & 100 of Companies Act. Mr Tata said that deferred revenue expenses of over Rs 700 crore, which form a part of miscellaneous expenditure, include Rs 320 crore and Rs 400 crore towards commercial vehicles and passenger cars, respectively. The major element is the case of commercial segment related to the Cummins project. Referring to Rs 32 crore diminution in value of investment, he said most of it was related to Concorde Motors where the foreign partners, running the project, decided to close part of their operations.

The Indica and commercial vehicle plants were operating at 50 per cent capacity. On the Indiva concept recently unveiled in Geneva, Mr Tata said the company has to look at international markets first and then India. Tata Engineering (Telco) is planning to introduce a 49 tonne commercial vehicle. Referring to considering new concepts, Mr Tata said that Telco may look at power systems, alternative fuels and hybrids as means of transportation and also consider increasing exports to European countries.