Atlas Cycles, India’s largest bicycle manufacturer, shuts operations at its last manufacturing unit. Atlas Cycles, however, insisted that the shutdown is only temporary, and the company will resume operations once it is able to raise around Rs 50 crore by selling surplus land. The company shut the factory on June 3 and laid off 431 remaining employees, though they continue to be on the roll of the company.
What this means:
Atlas Cycles has been a renowned name for bicycles in India. They shut their last manufacturing unit in Sahibabad, just outside the national capital, citing lack of funds to run the factory. The company started making losses in 2014. The financial crunch it faced since 2014 turned from bad to worse in the last one-and-a-half years, and the coronavirus lockdown has compounded it. The Company hopes to resume operations and swing back in business once they sell off their surplus land and they confirm to have a large land bank. They have already put up an application to the NCLT seeking permission to sell the surplus land. It is expected that with the sale the Company will be able to pay back all the dues of suppliers. As on 31-03-2020, the company has a total of 6,503,838 shares outstanding and the current stock price Rs. 42.85.