The Hindu Business Line : Trayons revival still in a limbo

THE delay in issuing a Government Order on the rehabilitation of the Travancore Rayons Ltd at nearby Perumbavoor might put off the reopening of the company under the revival proposal already approved by the State Cabinet.

The State Cabinet approved a draft memorandum of agreement with the Coimbatore-based Dinosaur Industries Ltd. Signing of the agreement would be possible only after issuing the Government Order based on the Cabinet decision, which was held up because of the Lok Sabha elections, official sources told Business Line.

Even after signing the agreement it might take another three to four months for reopening the unit as the promoters have to finalise various issues such as reduction in labour and settlement of accounts with the financial institutions, they said.

The State Cabinet last month had approved the rehabilitation proposal and decided to sign a detailed memorandum of agreement with the promoter, Mr N. Damodaran. After signing the agreement, the investor group would initiate discussions with the financial institutions and banks for a viable settlement of their dues.

Besides, it would commence discussions with the trade unions for a restructuring/rephasing process of the workforce, reliable sources said. It is understood that the promoters might effect a reduction in the number of workers through VRS and redeployment elsewhere.

Probably this is the first-ever event where the rehabilitation proposal of a private party has received the unanimous support of all the trade unions as well as the ruling and Opposition parties alike, including the CITU, trade union sources said.

As per the rehabilitation proposal, the promoter is to invest Rs 530 crore spread over a period of five years for modernisation of the company, the official sources said. In the first year, the promoter would invest Rs 60 crore for renovation of the existing plant. All the old machineries would be phased out in three years, they added.

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