Italy Govt's investment agency keen to invest in Titagarh Firema SpA

Rome, Italy (Urban Transport News): Invitalia, an investment body of the Italy government has shown interest to acquire about 20-30% shares of Titagarh Wagons' fully-owned subsidiary Titagarh Firema SpA. This development came after Titagarh Group sought capital support from the Italy government to cover losses faced during the pandemic.

Titagarh Firema had reported a loss of around 9 million euros in the last fiscal, including one-off exceptional expenses totalling 4.5 million euros due to operational restructuring.

Titagarh Firema got a significant highlight after bagging a Rolling Stock contract from Maharashtra Metro Rail Corporation Ltd (Maha-Metro) fo the supply of aluminum body coaches to Pune Metro Rail Project.

According to Titagarh Wagons MD & CEO Umesh Chowdhary, it is a major breakthrough that the Italian government will pick up a stake, apart from a PE investor, in Firema. He said that the promoters will also infuse fresh capital, he said that more details cannot be disclosed at this point in time due to confidentiality clauses until all approvals are in place.

In 2015, Italian railway firm Firema which is executing railway projects in Europe was taken over by the Kolkata-based Indian firm Titagarh Wagons Ltd. 

"Titagarh Wagons will retain the majority stake in the subsidiary, which now has a paid-up capital of 13 million euros, adding that the company has a 100% ownership in Firema, but it will get diluted after the entry of new investors," said Umesh Chowdhary.

He further said that the Italian government's investment will open a sea of opportunity for the company, adding that Government backing will help the company secure more orders and the recapitalization will boost the execution of new contracts.

Chowdhary expects Firema to become EBITDA-positive in the current fiscal, and said that it will take another year to be Net-positive. "The company was suffering due to legacy orders, he said that presently it has a healthy order book of 500 million euros, which is expected to be executed in the next four-five years," he added.