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Richa Mishra

NEW DELHI, Jan. 5

THE Board for Industrial & Financial Reconstruction (BIFR) has circulated a modified draft rehabilitation scheme (DRS) for Bombay Forgings Ltd (BFL) with September 30, 2001 as the cut-off date.

ICICI, the monitoring agency (MA), at a recent hearing, submitted that as directed in the last review hearing, the company had submitted its modified scheme which envisaged a one-time settlement (OTS) with the banks and FIs, sale and development of company's land at Kalina in Mumbai and VRS for the employees at Kalina plant. The company has two manufacturing facilities in Maharashtra.

At the review hearing held in February 2001, the company requested for more time to come out with an MoU with the workers, get in-principle agreement from the banks/FIs for OTS of the dues, permission from the local authorities for selling Kalina Plant, and submission of a fully tied-up and viable proposal, the Bench noted.

BFL had also submitted that it was capable of manufacturing competitive products and would be able to survive in the liberalised market. In view of these submissions, BFL was granted three months' time for the submission of a modified rehabilitation proposal with means of finance fully tied up and also for securing the consent of the concerned banks and FIs for OTS of their dues in terms of the revised guidelines of the Reserve Bank of India (RBI).

``In case the company failed to submit an agreed and viable modified scheme, the board would proceed for initiating further necessary action, including winding up of the company, in view of the fact that the company had been with the BIFR since 14 years as against the normal rehabilitation period of seven to 10 years,'' the board had observed.

Based on the MA's report, the Bench at the recent hearing circulated the modified draft revival scheme. The total cost of the scheme was estimated at Rs 36.99 crore.The modified proposal was considered at a joint meeting and was agreed to by the banks and FIs concerned in principle, ICICI submitted. Also, all the banks and FIs were satisfied with the results of the techno-economic viability study.

However, as regards the period of implementation of the modified scheme up to 2006, the Bench noted that the company had been with the BIFR for the last 14 years as against the normal rehabilitation period and, therefore, the implementation period had to be shortened.

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