Financial Daily from THE HINDU group of publications
Saturday, May 28, 2005
Financial Daily from THE HINDU group of publications Saturday, May 28, 2005 |
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Corporate
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Sick Units Autokast revival unlikely as Kerala Govt shelves proposal G.K. Nair
Kochi , May 27 THE chances of revival of the State-owned Autokast Ltd at Chertala appear to be remote as the Government is understood to have shelved the proposal submitted by an expert committee constituted by the employees of the company. Reliable sources told Business Line on Friday that to revive the company, the Government had to find substantial funds and that might be a hurdle in implementing the revival package. A few months ago, the Chief Minister is said to have proposed at a high-level meeting to arrange a loan of Rs 20 crore from the profit-making Kerala Minerals and Metals Ltd (KMML) for reviving the ailing company. But the proposal has not yet materialised. This amount could be used for clearing outstanding dues to the KSEB, a trade union leader who had participated in the meeting said. If the Government were to revive the company, it would have to reach a one-time settlement with bankers besides deferring payment of interest to Kerala Industrial Revitalisation Fund, concession for power, handing over of the company's 110 KV sub-station to the KSEB and making available working capital, he said. In fact, the Government had a few months back decided to freeze the recommendations of the Enterprises Reforms Committee (ERC), which had recommended closure of the unit. The ERC, upon evaluation of the physical and financial performance of the company, had recommended privatisation of the unit, with management control to strategic investors. However, the trade union leaders said that the "viable project proposal" prepared by an expert committee constituted by the SPATO, an organisation of the officers of public sector units and autonomous bodies in the State, was submitted to the State Government in November last. "The employees and officers of the company have pledged their wholehearted commitment and active support for the implementation of the proposal," he said. The company with a paid-up capital of Rs 17.97 crore had an accumulated loss of over Rs 100 crore and a negative net worth of Rs 88.70 crore as on March 31, 2002. The closure of the company would render 342 employees jobless. The Board for Industrial and Financial Reconstruction (BIFR) had ordered on September 30, 2004, that the company Autokast Ltd should be wound up following expiry of the two months' time given to the promoters of the company to submit a detailed revival scheme. Having forwarded the Bench's opinion to the Kerala High Court, it has directed that the company should not dispose of or alienate in any other way any of its fixed assets or current assets till such time an official liquidator was appointed by the High Court and he took over charge of the same for further disposal according to law.
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