The Hindu Business Line : BIFR okays revival scheme for S.S. Organics

THE Board for Industrial and Financial Reconstruction (BIFR) has sanctioned a Rs 3.58-crore revival scheme for the ailing Andhra Pradesh-based bulk drugs manufacturer S.S. Organics Ltd.

The cut-off date for the scheme is March 31, 2003. The one-time settlement scheme envisages payment of 100 per cent of principal amount (Rs 2.10 crore) of which 25 per cent of the amount (Rs 52.50 lakh) is to be paid upfront as down payment.

Further, the scheme stipulates that interest and other charges amounting to Rs 1.48 crore shall be paid by S.S. Organics in two equal annual instalments in the second and third year - on October 1, 2005 and October 1, 2006 with interest at 10 per cent (2.5 per cent below the PLR rate) from November 1, 2003.

It also envisages conversion of Rs 15 lakh towards recovery of part of the interest covered in the gross profit earned by the company but not paid to IDBI, into 1,50,000 equity shares of Rs 10 each in favour of IDBI with buyback arrangement. This would be at the discretion of IDBI.

According to the scheme, the Securities & Exchange Board of India and stock exchanges have been asked to exempt the company and its promoters, friends and associates for issue of equity shares on conversion of unsecured loan of Rs 2.50 crore at face value of Rs 10 per share and issue of equity shares to IDBI from the procedural provisions.

The Director General of Foreign Trade has been asked to permit the company to fulfil its unfulfilled export obligations within a period of two years from the date of the sanction of the scheme by BIFR. It has also been asked to revalidate the licences both for import and export to this effect, subject to the standard terms and conditions applicable to sick companies.

IDBI has been appointed as the monitoring agency.

S.S. Organics has been directed to constitute a management committee consisting of CEO of the company and monitoring agency representative. The committee would review on a quarterly basis the operations of the company and closely monitor the revival scheme.

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