The Hindu Business Line : Bakelite Hylam declared sick

BHL is engaged in the manufacture of laminates, sheets, rods and tubes, phenolic moulding materials, phenolic resins and insulating varnishes. At the recent hearing, the Board while declaring the company `sick' appointed State Bank of Hyderabad as the operating agency (OA) with directions to conduct a techno-economic viability study and prepare a revival scheme for the company, if feasible.

BIFR bench recalled that based on its audited balance sheet as on March 31, 2001, the company had filed a reference to the Board. As per the balance sheet, the company's entire networth has been fully eroded due to accumulated losses of Rs 18.53 crore.

According to the balance sheet, the company's paid-up share capital stood at Rs 12.24 crore.

The bench further directed that the cut-off date for the scheme would be taken as March 31, 2004. The cost of the techno-viability study would be borne by the company.

Further, the OA would get the valuation of the company's assets done through a Government approved valuer.

BHL was directed to submit its revival proposal within a stipulated time frame with the means of finance fully tied-up.

"Failing availability of any acceptable proposal and other relevant information from the company within the given time-frame, the OA may work out a scheme of its own under Reserve Bank of India guidelines, if practicable, proposing adequate promoters' contribution upfront so as to work out viability. Such a scheme could be offered to any interested parties if change of management becomes necessary in future," the order said.

Further, the company was asked not to dispose of, lease out, encumber or alienate in any way any of its fixed or current assets without specific prior approval of BIFR and the charge holders. However, if the unit is working, the current assets could be utilised for running day-to-day operations, the order said.

The Bench also cautioned the company against any default in the timely payment of dues to workers, including EPF and ESIC dues, gratuity, wages for the working period, on the ground that the case was pending before the BIFR.

Further, the secured creditors were denied permission to file/pursue suits already filed against the company at this stage. "The bench, however, would reconsider its decision, if the directions issued by it are not complied with by the company within the given time frame," the order said.

The BIFR bench also stated that the company should be regular in the payment of all its current dues arising after the cut-off date (March 31, 2004), since the recovery of such dues would not be covered in the proposed rehabilitation scheme.

"The bench would be averse to grant any extension of the cut-off date or to providing protection under the Sick Industrial Companies (Special Provisions) Act against the recovery of such dues," the order said.