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G.K. Nair

`Govt keen to avert repeat of earlier failure'

Kochi April 9 The Kerala Government is understood to have decided to enter into an agreement with the new promoter, who recently put forward a proposal to revive the Travancore Rayons Ltd (TRL) at Perumbavoor, only after the settlement of issues with the banks and financial institutions and trade unions.

"This is to speed up the revival of the company once an agreement is reached between the Government and the promoters," a senior official told Business Line.

The Koch-based Elenjical group recently submitted a proposal to the Government for reviving the unit, which has been under lay-off for the past four years. The Government accepted the proposal after several rounds of discussions.

The previous government had entered into an agreement with a Coimbatore-based promoter long back for reviving the unit. But it failed to take-off as the promoters could not arrive at a one-time settlement with the banks/financial institutions.

`Settlement First'

In order to avoid such a situation, the Government is said to have asked the promoters to reach a settlement with the financial institutions/banks and the trade unions before entering into an agreement.

The previous UDF Government had signed an agreement with the Coimbatore-based NDEE group for reviving the company. As per the agreement, the promoters would take over all loan liabilities, including those taken by the company under government guarantee and would be settled through one-time settlement.

Similarly, all dues to the State Government and Government agencies would also be settled. Government concessions and benefits included permission to pay the electricity charges and sales tax in instalments, and assistance in setting up new hydroelectric projects.

As per the proposal, the NDEE group was to invest Rs 530 crore spread over a period of five years for modernisation of the company.

About 1,200 workers are without wages since the lay-off. Currently, the unit is maintained by a skeleton staff of 70 people on monthly wages of Rs 500.

More Stories on : Sick Units | Non-Performing Assets | Textiles | Kerala

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