The Hindu Business Line : BIFR confirms winding up of Pennar Profiles

WITH repeated attempts to revive the ailing Pennar Profiles Ltd (PPL), yielding no results, the Board for Industrial and Financial Reconstruction (BIFR) has confirmed its opinion of winding up PPL.

In its recent order, the BIFR Bench noted that it had not been possible to formulate any acceptable revival scheme for PPL to make its net worth exceed the accumulated losses within a reasonable time while meeting all its due financial obligations. Confirming its opinion formed in April 2003, the Board observed, "The company was not likely to become viable in future and it was in public interest that PPL is wound up."

The Bench further directed that the company and its promoters would safeguard the assets and shall not dispose of any of its fixed or current assets till an official liquidator was appointed by the High Court concerned.

BIFR, in July 2003, had directed the company to enter into an understanding with the proposed foreign investor (a Danish company) and formalise the arrangement of supplying raw materials and buy-back of products. It had also asked the financial institutions and banks to sort out the sharing pattern of their outstanding dues. IFCI, the operating agency (OA), in its report had submitted that no consensus could be reached amongst the first and second charge holders with regard to sharing of one-time settlement (OTS) amount. The OA had recommended closure of PPL.

Pennar Profiles, part of the Hyderabad-based Pennar group, was declared sick in 1999 and IFCI was appointed as the OA to prepare a rehabilitation scheme for it.