The Hindu Business Line : BIFR approval for ICVL divestment

THE Board for Industrial and Financial Reconstruction (BIFR) has given its consent for the proposed privatisation of Instrumentation Control Valves Ltd (ICVL), the Palakkad-based subsidiary of Instrumentation Ltd (IL), headquartered in Rajasthan.

At a recent hearing, the Bench after considering the facts of the case, sanctioned Part-I of the modified draft rehabilitation scheme (MDRS) circulated by it on December 11, 2003, for the revival of IL.

Part-I of the MDRS envisaged 51 per cent disinvestment of ICVL, Palakkad, and Part-II of the scheme envisaged revival of IL by sale of its subsidiary Rajasthan Electronic Instrument Ltd (REIL), Jaipur, and integrating the rest of the business under the company.

In fact, the Cabinet Committee of Disinvestment (CCD) had approved the sale of 51 per cent stake of IL in ICVL to Larsen & Toubro (L&T) for Rs 16.2 crore in April 2003. ICVL is one of the three subsidiary companies of IL.

The recent hearing was held to consider the objections and suggestions to MDRS. The Bench sanctioned Part-I of the MDRS subject to certain conditions. It directed that the proceeds of the sale of disinvestment of ICVL amounting to Rs 16.2 crore would be kept in a `no-lien' account with the operating agency (OA), IDBI, and its further utilisation will be subject to the orders of the Bench, for which the OA shall submit necessary proposals to the Board.

Further, as per the terms of the sanctioned scheme, the promoters, Government of India (GoI) would extend the Government guarantee, which has expired on July 25, 2003, up to 2006-07 amounting to Rs 25 crore. The Board also said that the banks might file an application for distribution of the amount deposited in the no-lien account.

It also asked GoI and the Income-Tax Department to submit their final consent and comments on Part-II of the MDRS within a stipulated timeframe, which would expire on April 22, failing which their consent would be deemed.

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