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Mony K. Mathew

Separate packages for holding company, subsidiaries

Thiruvananthapuram , Dec. 19

After years of uncertainties and delay, the rehabilitation process of the Kerala State Electronics Development Corporation (Keltron) has been set in motion with fresh initiatives to put together a viable package.

The Government is, in fact, considering two revival packages, one for the holding company and the other for subsidiaries, according to officials in the Industries Department.

LIABILITIES

For the holding company, the main task is the settlement of past liabilities, which were pegged around Rs 57 crorewhen the Government and the consortium of banks last met on the issue. The amount was to be settled in instalments over a couple of years, which, however, did not happen.

The fresh proposal is to pay a part of the liabilities upfront from the funds earmarked in the budget for public sector undertakings, while the balance will be settled through deferred payment from internal accruals of the company over a period of time.

Keltron has been making operating profits in the past few years. The company recorded a turnover of Rs 109 crore and an operating surplus of Rs 14 crore in 2005-06, as against Rs 82.5 crore and Rs 8.4 crore respectively in the previous year. In the current year, it is targeting a turnover of Rs 132 crore and a matching operating profit.

PARTIAL AMALGAMATION

In the case of the subsidiaries of Keltron, the original proposal was to amalgamate them into a single entity as part of the revival package. But this has not received the Government's nod, as the units are located in different parts of the State.

An alternative proposal now considered by the department is to bring together units located in proximity. For instance, four subsidiaries, namely, Keltron Components Complex Ltd, Keltron Crystals Ltd, Keltron Resistors Ltd and Keltron Magnetics Ltd are all in Kannur and could be amalgamated into a single company.

Representatives of the consortium of banks and Government officials are scheduled to meet in the coming days to thrash out issues like past liabilities and the mode of settlement. The final packages will then be submitted to the Board for Industrial and Financial Reconstruction (BIFR) for approval.

More Stories on : Sick Units | PSU | Electronics | Kerala

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