The Hindu Business Line : Panel to look at revival of sick seafood units

THE Government has set up a committee, comprising representatives of the Finance and Commerce Ministries, Indian Banks Association (IBA), RBI and the Export Credit Guarantee Corporation (ECGC), to look into the rehabilitation of sick seafood companies.

The decision to set up the committee has come after earlier discussions between the seafood units and IBA could not make much headway, seafood industry sources said here.

The Chairman of the Marine Products Exports Development Authority (MPEDA) is the convenor of the committee, which has already met once in Mumbai. Another round of discussions are slated to take place next month, said an industry representative involved in the process.

Around 130 seafood units, who are in financial distress, are trying to keep their head above the water by working out a rehabilitation package with their lenders.

Some of these banks have initiated recovery proceedings against the seafood units. The representative said proposals put forth by the IBA during the previous discussions were not viable for the units. They took the matter to the Commerce Ministry through the Seafood Exporters Association of India (SEAI) and Forum for Revival and Reconstruction of Seafood Export Industries.

The bone of contention between the exporters and IBA was the working capital loans provided by the banks, he said.

The committee will now collect details pertaining to each exporter involved and prepare a report that will be submitted to the Commerce and Finance Ministries.

The debt-laden seafood units, most of whom are declared sick, collectively owe around Rs 260 crore to various banks and financial institutions. Over 50 per cent of this amount is accumulated interest on loans.

According to the seafood industry, factors beyond its control such as plague in Surat in 1995, diseases in aquaculture farms and a ban by the European Union (EU) on Indian seafood exports in 1997 were the prime reasons for the units' misfortune.

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