Financial Daily from THE HINDU group of publications
Friday, Oct 11, 2002
Financial Daily from THE HINDU group of publications Friday, Oct 11, 2002 |
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Corporate
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Sick Units Decision soon on Trayons revival Deeptha Rajkumar
KOCHI, Oct. 10 THE State Government is expected to take a final decision on the revival of the sick Travancore Rayon Ltd (Trayons) within the next fortnight. Speaking to Business Line, the Industries minister, Mr P.K. Kunhalikutty, said that the sub-committee of Ministers, which met recently, had in principle approved a revised proposal submitted by the Coimbatore-based Dinosaur Industries Ltd (DIL) to revive Trayons. ``The Government has decided to revive it with private sector participation. The revised proposal also talks of a new technology, whereby using the same facilities, there is value addition to the existing products, which are then bought out in a new form,'' the Minister said. The Appellate Authority for Industrial and Financial Reconstruction (AAIFR) had dismissed on April 15, 2002 an appeal submitted to revive the sick Trayons. In its appeal, DIL had stated that revival of Trayons would require substantial input of modern technology and investment in plant and machinery. It had proposed an investment of Rs 500 crore in there phases - of Rs 60 crore, Rs 175 crore and Rs 265 crore - with the time schedule to be finalised after signing the MoU. The proposal had also sought various concessions and facilities from the Kerala Government.AAIFR had dismissed the appeal on the grounds that the proposal did not contain any reference to the company's existing operations for the future. Its accumulated losses for the year ended March 31, 2001 stood at Rs 82.99 crore.In addition, there were accrued/unprovided liabilities such as gratuity (Rs 8.33 crore) and demand raised by Kerala State Electricity Board (Rs 21.5 crore). The plant has been lying closed since July 2001 and the workers have been laid off. The Trayons case has been before BIFR for over 14 years.A scheme had also been sanctioned in September 1989 whereby there was fresh infusion of funds in excess of provisions under that scheme.However, the company continued to add to its losses. It was in end-August 2002 that the State Government called for a fresh proposal from the promoter on the concessions demanded by them for reviving the sick company. The sub-committee had then asked the promoters to submit a fresh proposal covering the relevant issues.
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