The Company was incorporated in 1945 and is listed on all major stock exchanges in India. Over the years, it has remained well managed and consistently profitable. Mr. Gautam Thapar took over as the Managing Director in 1997 and since then, BILT has embarked upon a comprehensive restructuring aimed at becoming the market leader in the Indian writing and printing market. This restructuring is being implemented in two phases. In the first phase, BILT transformed itself from a conglomerate into a pure paper Company by stripping it of all its unprofitable investments and non-paper businesses, using the cash to retire high cost debt. The second phase of restructuring is at present underway and aims at establishing BILT as the largest integrated writing and printing paper manufacturer in India, with a total paper capacity of 230,000TPA and pulp capacity of 105,000TPA.

The Project involves capacity expansion at three of BILT''s paper manufacturing facilities through both, modernization and addition of new equipment. The Project would enhance the Company''s competitive strength by helping it acheive economies of scale and stabilize its capital base through a low debt/equity gearing necessary to ride out the cyclical nature of the cash flows in the sector.

The development impact of the Project is in terms of (i) enhancing the long-term viability of companies like BILT that are operating in cyclical industries by lowering their cost of funding and extending the maturity of debt obligations, thus stabilising its cash flows through periods of cyclicality; (ii) promoting social forestry - the Company ecncourages small farmers located close to the plant to grow eucalyptus and casuarina, which are sources of pulp, by providing them with free saplings and other inputs. These cash-crops provide a stable income stream for the farmers, whose earning s are typically subject to seasonal fluctuation; (iii) the Company is developing innovative value added products to upgrade the market in quality, especially the lower-end segments like Creamwove; (iv) R&D efforts- which have resulted in substantial cost savings for the Company, passed on to the customers, by improving efficiencies in raw material usage.

IFC''s role in this project is two-fold : (i) Extending maturity of debt - Due to the cyclical nature of the paper industry, even strong companies like BILT are unable to source funding greater than 5 years. As a result cash flows are severely strained during a down cycle, leaving little surplus for debt servicing or modernization/expansion. The IFC guarantee will enable BILT to overcome this constraint by extending the maturity of debt available to it locally, by 5 years; (ii) Supporting BILT''s restructuring initiative - The IFC investment will support thr restructuring of a family owned conglomerate into a professionally managed group of individual companies focussed on individual business lines.