Financial Daily from THE HINDU group of publications
Friday, Jul 08, 2005
TRL properties to be auctioned for PF recovery
Kochi , July 7
THE Regional Provident Fund Commissioner here has notified auction of some of the properties of the sick Travancore Rayons Ltd at nearby Perumbavoor to recover dues amounting to Rs 1.97 crore.
TRL is currently in the process of being revived by a Coimbatore-based private promoter.
A senior official of the RPFC told Business Line that the company's clubhouse along with 1.90-acre land, quarters on 66 cents and 22 cents housing a cycle stand would be auctioned on August 8. TRL had defaulted in remitting the PF contributions of the employees and the company's share from July 2001.
There was no other option left except auctioning these properties to recover the amount due to around 1,000 employees of company, he said.
It might be noted that the State Government had signed an agreement with the Coimbatore-based promoters, NDEE Group, in July 2004 for reviving the unit. But, the promoters have not been able to do anything so far to reopen the company, trade union sources said. The reason attributed by them is the delay in reaching a one-time settlement (OTS) with the financial institutions and banks.
The Chief Minister, Mr Oommen Chandy had convened a meeting of the representatives of the banks, financial institutions and the promoters about three months ago in which he had advised the promoters and the bankers to continue their discussions and arrive at a mutually acceptable position before April 27. But, nothing is understood to have happened so far.
The banks/FIs and the promoters have to come down from their present stand for reaching a settlement, Mr P.P. Thankachan, Trade Union Leader and former Speaker of the State Legislative Assembly, who participated at the last meeting said. Both parties are sticking to their own positions and hence the meeting "did not reach anywhere", he said.
The failure in reaching the OTS has impeded the progress on discussions with the trade unions and on important issues to be settled for re-opening of the company, he said.
As per the agreement signed between the government and the promoters all the loan liabilities including those taken by the company under government guarantee would be taken over by the promoters and would be settled through one-time settlement.
Similarly, all the dues to the State Government and Government agencies would also be settled. Government concessions and benefits would include permission to pay the electricity charges and sales tax in instalments and assistance and cooperation for setting up of new hydroelectric projects, according to official sources.
It was expected then that the re-opening of the company would take place in three to four months as the promoters had to hold discussions with the financial institutions, banks, etc., for a viable one time settlement of their dues. Besides, it had also to discuss with the trade unions for a restructuring/re-phasing process of the work force, they 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, they 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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