The Hindu Business Line : High-level panel meet to take up Travancore Rayons' liabilities issue

Kochi May 21 Reopening of the sick Travancore Rayons Ltd at nearby Perumbavoor might be delayed as signing of an agreement by the Government with the new promoters would take place only after studying the recommendations of a high-level committee on the liabilities of the company.

The committee headed by Mr T. Balakrishnan, Principal Secretary, Industries Department, and comprising Secretaries of the other departments concerned would meet on May 25 to discuss the liabilities of the sick unit such as outstanding dues to the State electricity board, sales tax department etc., the State Industries Minister, Mr Elamaram Kareem, told Business Line.

Based on the recommendations of the committee a decision would be taken. The liabilities are greater than the assets of the company. The Government may have to write off some of these dues and, hence, a decision of the Cabinet might be necessary, the Minister said. Since the Government is for the re-opening of this sick unit, a positive decision, including signing of the agreement, can be expected soon, he added.

The new promoters, Kochi-based Elenjical group of Industries, have already reached in principle a one-time settlement with the banks and financial institutions. But, it could be implemented only after signing an agreement with the Government, the promoters said. A meeting with the trade union leaders is scheduled for May 22 for arriving at a final agreement, they said.

"We have already arrived at an agreement with the banks and financial institutions to settle all the outstanding dues by paying Rs 5 crore," Mr Joseph Varughese, Managing Director of the group, said.

Promoters nod

The promoters are ready to go ahead with the revival of the company as per the earlier agreement that the Government had entered into with the Coimbatore-based group minus the demand for sales tax concessions and the allotment of 300 acres of forestland. These two clauses could be deleted from the agreement, "as we don't need them", he said.

According to him the Chief Minister had directed the departments concerned to finalise all the issues and sign an agreement within a month and that the deadline had expired on May 1, he said. Now, it is for the Government to come out with an agreement and "if it comes today we will start work to revive the company from tomorrow," he said.

The promoters have paid Rs 50 lakh to the Kerala State Industrial Development Corporation (KSIDC) as a token money to show the promoter's commitment to reopen the company, Mr Joseph said.

The present promoter would invest Rs 250 crore in three years. They would initially start operations of the plants manufacturing cellophane and pulp.

Manufacturing of rayons would be taken up in the second stage, he said. Besides, a cluster of units would come up in the compound to be set up by interested parties. Applications have been received from 50 interested parties and the units would be in food processing, biotechnology and research in biosciences, he said.

According to him, 400 workers would be employed in the cellophane and pulp units while the rest would be absorbed in the cluster of units.

The present LDF government has accepted the rehabilitation proposal submitted by the new promoters to revive the unit.

In fact, BIFR had ordered the closure of the sick unit in 2002. It was at this juncture that a Coimbatore-based promoter came forward with a revival package and as it was under the consideration of then UDF government, the Kerala High Court had stayed the closure of the unit. The present Government had "avoided" this promoter and chosen the Kochi-based Elenjical group.

The company is under lay-off for about six years now and about 1,200 workers are without wages.

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