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Govt proposes deferred payment of Keltron dues
Mony K. Mathew
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6% simple interest offered on Rs 50 crore
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The total liabilities of Keltron to the banks have been put at Rs 57.85 crore, which is the principal amount, after waiving accumulated interest.
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Thiruvananthapuram
Feb. 22
At the latest round of negotiations with the consortium of banks, the State Government has offered to settle the liabilities of the Kerala State Electronics Development Corporation (Keltron) in a deferred payment mode.
The total liabilities of Keltron to the banks have been put at Rs 57.85 crore, which is the principal amount, after waiving accumulated interest. The Government, according to sources in the Industries Department, has offered to make an upfront payment of Rs 7.50 crore.
The balance Rs 50 crore is to be made in four instalments of Rs 12.50 crore each over the following four years. These payments will carry a simple interest of six per cent.
It is pointed out that as per the Reserve Bank guidelines, one-time settlement of liabilities with interest relief should be made at one go and not as deferred payments. It is in this context that the Government has offered to pay a simple interest on later payments.
OPERATING PROFITS
Keltron has been making operating profits for the last couple of years. The settlement of liabilities will facilitate preparing of a revival package for the company by the Board for Industrial and Financial Reconstruction (BIFR).
In 2005-06, Keltron posted a turnover of Rs 109 crore, which was a 30 per cent improvement on the Rs 82.50 crore in the previous year. It made an operating profit of Rs 13 crore as against Rs 8.40 crore in 2004-05.
At the same time, the net worth of the company continued to be negative and its accumulated losses stood at Rs 442.55 crore at the end of the year.
The company has targeted a higher turnover of Rs 132 crore and a matching surplus in the current year. It hopes to achieve a turnaround after the settlement of liabilities and the implementation of a revival package.
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