The Hindu Business Line : Kerala to appeal against BIFR closure notice on Autokast

THE State Government will appeal to the Appellate Authority for Financial and Industrial Reconstruction against the order of the Board for Industrial and Financial Reconstruction (BIFR) for closing down the State-owned Autokast Ltd.

The Industries Minister, Mr Kunhalikutty, said on Wednesday that the State Government had issued orders accepting the recommendations of the Enterprises Reforms Committee (ERC) for the rehabilitation of the company. But there had been opposition from the trade unions against the proposal for private participation in the company.

The Government discussed the issue with union leaders in July this year and a new rehabilitation package emerged from the meeting.

The BIFR order has come at a time when the new package is under the consideration by the Government, said the minister.

The accumulated loss of the company is Rs 119 crore. The company will require Rs 3.06 crore to implement the new rehabilitation proposal, of which Rs. 75 lakh has to be deployed immediately.

In the circumstances, the Industries Department will request the Chief Minister and the Finance Minister to make available the necessary funds for the rehabilitation of Autokast under the new policy of one-time settlement, said Mr Kunhalikutty.

Autokast was referred to BIFR in 1992 after the company incurred continuous losses in the previous years. Subsequently, BBIFR approved a rehabilitation package in 1995, which, however, was not implemented.

Autokast is among the 12 public sector undertakings identified by ERC a couple of years ago for private participation. In its report, ERC stated that the company could not operate profitably despite continued financial support from the State Government to the tune of Rs 55 crore. The company also owed Rs 42.54 crore to the banks and financial institutions by way of principal amount and interest.

According to the latest review of Bureau of Public Enterprises, Autokast incurred an operating loss of Rs 8.70 crore in 2001-02 and its net worth stood negative at Rs 88.70 crore. Besides, the capacity utilisation was at a low of 17 per cent.