LML Completes Financial Restructuring
April 8, 2005
Filed under Uncategorized
LML Ltd., India's second largest motorbike manufacturer, says it completed a financial restructuring which included mobilization of fresh funds through the issue and allotment of equity shares, warrants and Foreign Currency Convertible Bonds (FCCBs) from overseas investors.
LML received Rs 2 billion ($45.72 million) from the transactions. The company says the funds will allow it to reduce debt from approximately Rs 3.2 billion ($73.15 million) to Rs 1.1 billion ($25.14 million).
A former partner to Piaggio, LML had been undergoing serious difficulties arising out of a shift in the market from geared scooters to motorcycles which disabled it from realigning its business model to the needs of the market due to circumstances beyond its control. LML sold approximately 280,000 two- and three-wheeled motorbikes last year. The company says its facilities have a current annual production capacity of 720,000 units.
LML says it will continue internal restructuring during the next two to three months. Main projects include streamlining organizational structure, controlling costs, and expanding its sales and service network.
Chicago-based Genuine Scooter Company's Stella scooter model is manufactured by LML. Retailing for $2,899, the Stella comes with a Grimeca disc brake, Bitubo gas shocks, Continental Zippy tires, and a 150cc two-stroke motor catalyzed to meet U.S. emissions standards in 49 states, California excluded.