The Hindu Business Line : BIFR may clear revival of IISCO

The Board for Industrial and Financial Reconstruction (BIFR) has stated that if the rehabilitation proposal submitted by the company and Steel Authority of India Ltd (SAIL), the holding company, is found acceptable by all parties, the Bench would consider sanctioning the scheme.

Considering the facts of the case at the recent hearing, the Bench noted that the company and SAIL have submitted a rehabilitation proposal, which had the consent of the secured creditors and majority of the workers' unions. Some of the workers' unions, however, were objecting to the package formulated by the company especially requesting closure of Kulti mines, the Bench noted. "The company is required to sort out the matter with the workers unions and banks," it said.

The BIFR bench also observed that the Government of West Bengal has agreed, in principle, to extend the envisaged relief and concessions. "The proposal submitted by the company should be discussed in a joint meeting where all the participants may give their final consent or otherwise," it said. IDBI, the operating agency (OA), has been directed by the Bench to discuss the same in a joint meeting and submit a status report along with a draft rehabilitation scheme (DRS) by March 31.

The Bench also observed that the appointment of a permanent managing director would facilitate implementation of the scheme and revival of the company. BIFR suggested that steps be initiated for early filling of the vacancy.

At the recent hearing, IDBI representative said that the DRS submitted by the company was discussed in a joint meeting held on December 23, 2002. The cost of the scheme of Rs 1,089 crore included provisions for voluntary retirement scheme (VRS) to the employees of Kulti Works and Burnpur and Colliery Mines. It also provided for cash losses, which the company would incur during 2002-03 and 2003-04. The scheme would be funded from grants to be given by Government of India (GoI) and market borrowings against GoI guarantee.

IDBI also said that the proposal was discussed with the labour unions, which were agreeable to VRS. The company has, however, since desired that the cut-off date should be modified to October 31, 2002, against April 1, 2002, earlier allowed by the Bench. It was proposed that VRS would be offered to 9,000 workers including Kulti Works. The proposal was required to be modified to the extent of actual losses incurred by the company up to September 30, 2002.

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