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Wednesday, Jul 02, 2003

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Takeover of National Standard Duncan units — BIFR directs Tata SSL to submit a tied-up proposal

Richa Mishra


THE Board for Industrial and Financial Reconstruction (BIFR) has directed Tata SSL Ltd to submit a fully tied-up proposal for the two divisions of the ailing National Standard Duncan Ltd (NDL), which the company proposes to take over.

NDL, a G.P. Goenka company, engaged in manufacturing bead wire for tyres, tyre moulds, tyre drums and tyre machinery, was declared sick in January 2002. The Bench had then directed ICICI to advertise for a change in management of the company. In response to the advertisement ICICI had received a letter from Tata SSL.

At a recent hearing, the Bench noted that Tata SSL had initially given a letter of interest for taking over the sick company, but it appears now that they were interested only in taking over two units of NDL at a price of Rs 19 crore. The secured creditors have asked the Tatas to improve the offer to Rs 21 crore, the Bench observed. The Tatas had offered to pay Rs 19 crore for NDL's bead wire units at Baddi and Doddabalapur.

The BIFR Bench also noted that the present promoters, who would be taking over the other divisions of the company, primarily consisting of the tyre mould divisions, have to submit a separate rehabilitation proposal. It, therefore, directed NDL to submit a separate rehabilitation proposal for the divisions, which would be retained by them, indicating as to how the balance dues of the secured creditors would be paid within a stipulated time frame.

The Bench observed that there was no settlement on the amount that the secured creditors would allow the existing management to retain out of the proceeds received from the Tatas to pay the dues of pressing creditors, workers and statutory dues. The Board asked the secured creditors to sort out among themselves as to how the sale proceeds would be shared.

The company, at the hearing, submitted that the two divisions being taken by the Tatas represented 85 per cent of the business of the company.

It directed, ICICI, the operating agency (OA), to examine the proposals submitted by the Tatas and the present management, and inform the BIFR within the stipulated time frame.

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