The Hindu Business Line : OTS delay hampers Trayons revival

THE hype that was created when the State Government and the Coimbatore-based NDEE Group entered into an agreement a year ago following marathon discussions to re-open the sick Travancore Rayons Ltd (TRL) at nearby Perumbavoor appears to have subsided now with no progress in sight for its revival.

Even after such a long time the promoters have failed to reach a one-time settlement (OTS) with the banks and financial institutions. The OTS proposal of the promoters is understood to have been rejected by the banks. In fact, to sort out the issues the Chief Minister, Mr Oommen Chandy, had convened a meeting with the representatives of banks/FIs and the promoter company last April. But, as it failed to reach any agreement on the OTS, the CM had asked the promoters to discuss the issue with the banks and FIs with a proposal acceptable to both the parties. However, nothing as such had happened so far, trade union sources told Business Line.

The inordinate delay, in concluding the OTS, would lead to a cascading effect on settlements on various other issues, which in turn would prolong the re-opening of the company, they alleged. The promoters, they said, were sticking to maximum concessions, while the banks and FIs were not showing any interest to dilute their position. Meanwhile, the Regional Provident Fund Commissioner had already notified that it would auction some of the properties of the company on August 8 for recovering Rs 1.97 crore outstanding from the company towards PF contributions of its employees.

The State Government had signed the agreement with the promoters in July 2004 for reviving the unit. But, the promoters have not been able to do anything so far to re-open the company, union leaders said. The reason attributed by them is the delay in reaching an OTS with the FIs and banks.

As per the agreement signed between the Government and the promoters all the loan liabilities, including those taken by the company under government guarantee would be taken over by the promoters and settled through OTS. Similarly, all the dues to the State Government and Government agencies would also be settled.

Government concessions and benefits would include permission to pay the electricity charges and sales tax in instalments and assistance and co-operation for setting up of new hydroelectric projects, according to official sources.

According to revival proposal, the promoter is to invest Rs 530 crore spread over a period of five years for modernisation of the company, they said. In the first year, the promoter would invest Rs 60 crore for renovation of the existing plant. All the old machineries would be phased out in three years, they added.

The BIFR had ordered the closure of the sick unit in 2002 stating that the proposal submitted by the promoters was just a list of demands. However, the State Government had accepted the package and pushed it ahead and got the closure order stayed by the Kerala High Court.

The company is under lay-off for over two years now and about 1,200 workers are without wages. At present, the unit is maintained by a skeleton staff of 70 people on a monthly salary of Rs 500, official sources said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
PowerGrid bags Bhutan project

Suprajit increases production capacity of cable division

Kanoria Chem to hike power production

Ranbaxy gets tentative FDA nod for diabetes drug

Shareholders okay Aurobindo Pharma's $60-m FCCB issue

HM-Mitsubishi to expand operations

SAIL okays new slab caster for Bhilai Steel

Agro Dutch plans unit in Chennai to produce cans

Gurgaon incident won't impact FDI inflows, say MNC chiefs

Delphi, Varroc join hands for OE market

OTS delay hampers Trayons revival