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Wednesday, July 11, 2001

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Search for new management at Montari Leather

Richa Mishra

NEW DELHI, July 10

THE Industrial Development Bank of India (IDBI) has been directed by the Board for Industrial and Financial Reconstruction (BIFR) to advertise for a change of guard for Montari Leather Ltd (MLL).

MLL was declared sick on December 1998. At the recent hearing, in view of the fact that there were material changes in the management structure and shareholding pattern as well as in pattern of settlement of the dues of the secured creditors, the board c ould not sanction the draft rehabilitation scheme (DRS) for circulation.

The bench, however, directed IDBI, the operating agency (OA), to advertise for a change in the management of the company and give further six weeks time for receiving responses to the advertisement.

IDBI has been directed to prepare a profile of the company based on the material available with them and any other material made available to the OA by the secured creditors. Further, the OA is to submit copies of the due diligence statement given in the advertisement to all concerned, the bench said.

The board has asked the OA to satisfy itself specifically with respect to the resources of the company/promoters/co-promoters and indicate that in case they were coming up with any proposal in response to the advertisement.

Moreover, it should be indicated in the advertisement that they will deposit at least 20 per cent of the funds which they had committed to bring in. The fund should be put in a separate interest bearing no-lien account (NLA) with the OA and will be retur ned in the event of their proposal not being considered, the bench said.

``If no proposal is received at the end of the stipulated time or if the OA has not received any acceptable viable proposal, then IDBI will inform the board. The Bench will then consider other alternatives including the winding up of the company,'' the b oard said.

The prospective bidders could give the proposal with or without one-time settlement (OTS) or on the basis of RBI guidelines, the bench said.

MLL has been directed to submit its provisional balance-sheet and its annual audited accounts for March 2001 within a given time frame to BIFR, the board said. It has also been asked to submit the list of all unsecured creditors and secured creditors to the board. MLL is to submit its liability towards the secured creditors, workers and other liabilities up to March 2001, the bench said.

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