The Hindu Business Line : Pearl Engg gets BIFR nod to raise funds

PEARL Engineering Polymers Ltd (PEPL), manufacturers of PET resin, has received the Board for Industrial and Financial Reconstruction's (BIFR) nod to raise funds from strategic investors for rehabilitation of the company. This is, however, subject to the company's promoters meeting any financial shortfall thereof, the Bench said.

Considering the fact that the company is repaying the dues of financial institutions and banks, the Board condoned the past delays and permitted the company to raise funds from strategic investors by August. The Bench, at the earlier hearing, had directed the company to move an application seeking `condonation for delay in inducting funds and issuance of capital' for revival of the company.

PEPL, promoted by Pearl Polymers Ltd, was declared a sick company in 1999 and a rehabilitation scheme was sanctioned in September 2001. The scheme envisaged induction of Dinesh Kothari & Associates as strategic investors besides writing down of share capital. The cost of the rehabilitation scheme was estimated at Rs 24 crore mainly towards payment of dues to be funded by equity share capital of Rs 15 crore and fresh working capital of Rs 9 crore. The Bench at the last hearing also observed that the continuation of scheme was dependent on Mr Kothari bringing in the funds and the working capital arrangement being tied-up.

At the recent hearing ICICI, the monitoring agency (MA) submitted that funds by promoters have been fully inducted by March 31, 2003 and interest payment to ICICI and Asian Finance & Investment Corporation Ltd (AFIC) is regular and one-time settlement (OTS) payment to the banks is also honoured. Therefore, the MA submitted that the delay may be condoned.

Besides, the strategic investors have brought in approximately Rs 5 crore against the envisaged Rs 10 crore and have sought time for the balance. The MA has suggested that as the revised schedule for OTS payment to the bank matches this, the delay may be condoned, the Bench noted.

ICICI also submitted, "the company had allotted equity shares to the lenders as envisaged in the scheme, but certain formalities are pending the listing approval from all the stock exchanges."

The MA has recommended approval of the position of equity, the Bench noted.

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