Business Daily from THE HINDU group of publications
Wednesday, Jul 19, 2006
Business Daily from THE HINDU group of publications Wednesday, Jul 19, 2006 |
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Corporate
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Sick Units Web Extras - Textiles States - Kerala TRL revival likely by Oct G.K. Nair
Kochi , July 18 The long-awaited revival of the sick Travancore Rayons Limited (TRL) at nearby Perumbavoor, which has been defunct for the past five years, is likely to take place by October, as the only impediment is expected to be removed soon, according to the new promoters of the company. The promoters had already reached a one-time settlement with the IDBI late last year. But, such an arrangement with other financial institutions could not be reached due to the nonflexible stand taken by a consortium of banks. The State Government is understood to have approached the Union Finance Ministry to direct the nationalised banks to take a favourable decision on the lines of the IDBI agreement with TRL, Mr Damodaran, Managing Director, EDEE Group (the promoter company), told Business Line.
Meanwhile, "we will have discussions with the Trade Unions for reaching a long-term agreement on wages and other matters," he said. The agreement with the workers would be for 10 years, he said.
No retrenchment
"There won't be any retrenchment of the existing workforce and instead we would be needing more people. Preference would be given to family members of the workers," he said. Once agreements are reached with the banks/FIs institutions on one-time settlement and with trade unions, the promoters would approach the Kerala High Court to vacate the order of the BIFR to liquidate the company, he said. If everything goes well, "we would be able to re-open the company in October," he said. The promoters would invest Rs 230 crore in the first year of which Rs 77 crore would be by the promoters while the balance would come from financial institutions, he said. In the second phase, Rs 290 crore would be invested. He said total investments would cross Rs 1,000 crore depending upon the performance of the company, he said. The Government had signed an agreement with the Coimbatore-based promoters, NDEE Group in July last year for reviving the unit.
Government concessions and benefits would include permission to pay the electricity charges and sales tax in instalments and assistance and cooperation for setting up of new hydroelectric projects, according to official sources.
The agreement, which had been prepared after detailed examination by different government departments, was finalised after discussions with both ruling and opposition parties and the trade union representatives.
Modernisation plans
As per the rehabilitation proposal, the promoter is to invest Rs 520 crore spread over a period of five years for modernisation of the company, they said. In the first year, the promoter would invest Rs 77 crore for renovation of the existing plant. All the old machineries would be phased out in three years, they added.
The BIFR had ordered the closure of the sick unit in 2002. It was at this, juncture the new promoter had come forward with a revival package and as it had been under the consideration of the state government, the Kerala High Court had stayed the closure of the unit.
The company is under lay-off for over two years now and about 1,200 workers are without wages. At present, the unit is maintained by a skeleton staff of 70 people on a monthly wages of Rs 500, trade union sources said.
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