The Hindu Business Line : Uncertainty over revival of Autokast continues

UNCERTAINTY hovers over the revival of the State-owned Autokast Ltd in Alapuzha district due to the indifferent approach of the authorities. The two-month time sought by the State Government for taking a final decision on implementing the package has expired.

The revival package of the Save Autokast Form (SAF) was accepted by the Government but it is still pending for a final decision. The change in Ministry is likely to delay the revival of the company, Dr Thomas Issac, MLA, who has been instrumental in preparing the revival package told Business Line on Thursday.

The proposal was accepted by the Industries Minister at a meeting attended by Dr Issac and the INTUC leader, Mr Aryadan Mohammed, who is at present a Minister in the Oommen Chandy Government.

He said that the trade unions had put in their best efforts to show that the package, if implemented, could put the company back on the rails by raising the production to 270 tonnes a month.

With modernisation and modification of the machinery, production could be increased to 375 tonnes a month and at that level all the operating losses could be wiped out, Dr Issac said.

The major constraint now is lack of working capital. The trade unions and the management had requested the Government to arrange a working capital of Rs 1 crore and Rs 3.5 crore as a soft loan spread over three years for modernising the machinery. But, a decision on this demand is also pending, he alleged.

The BIFR, in its last sitting on June 29, had asked the State Government to submit a viable revival proposal in 14 days and in the event of failure to do so, the unit would be closed without notice.

The deadline set by the BIFR expired on July 13. However, the Government had sought two months' time for taking a final decision to implement the proposal to the Operating Agency (OA) the State Bank of Travancore (SBT).

The BIFR had already show-caused that the bank could close the company to sell out the assets to recover the loan amount of Rs 522 lakh and interest from 1985 in case the State Government is not yet ready to submit a revival programme for the AKL and not deposited 25 per cent of total amount with the OA.

According to Dr Thomas Issac, the operating agency might not be able to wait indefinitely for a government decision. He said that the one-time settlement could be completed with the banks and financial institutions by paying Rs 12 crore and this amount had been already provided by the ADB for restructuring of public sector units for VRS and OTS.

He said that the company with a paid up capital of Rs 17.97 crore had an accumulated loss of Rs 107 crore and a negative net worth of Rs 88.70 crore as on March 31, 2002. The closure of the company would render 350 employees jobless, he said.

"The employees are worried now over the inordinate delay in clearing the proposal," Mr Jayachandran, General Secretary, SAF said.

Earlier, the Enterprises Reform Committee of the State Government, upon evaluation of the physical and financial performance of the company, had recommended privatisation of the unit, with management control to strategic investors, he pointed out.

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