The Hindu Business Line : TRL revival stalled; promoters blame banks

Difficult times
TRL has been under lay-off for about four years now and about 1,200 workers are without wages.
Promoters say that unless the Government pursues the one-time-settlement seriously, they would not be able to revive the company

Kochi , Sept. 10

The revival of the sick Travancore Rayons Ltd (TRL), which is under lay-off for around four years, might not take place if the State Government does not take a pro-active approach.

The company's revival has been stalled by the alleged non-cooperative attitude of a consortium of banks led by the Indian Bank, according to the promoters. They told Business Line on Friday that the promoters had submitted a proposal to the consortium of banks on lines similar to the one-time-settlement reached with the Industrial Development Bank of India (IDBI). However, the banks consortium does not seem to tow the IDBI line.

The failure in reaching a one-time-settlement has, in fact, stopped the progress on the rehabilitation of the company. However, Mr Damodaran, Managing Director of the Coimbatore-based promoter company, said that the group was preparing to hold discussions with the Trade Unions of TRL next week and their proposal to the unions had already been sent to them.

Previous agreement

The previous UDF Government had signed an agreement with the promoters long back for reviving the company. As per the agreement signed between both the parties, the promoters would take over all loan liabilities including those taken by the company under a Government guarantee and it would be settled through a one-time settlement. 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 cooperation for setting up of new hydroelectric projects, according to official sources.

Revival plan

As per the rehabilitation 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. It was then that the new promoter had come forward with a revival package. However, as it had been under the consideration of the State Government, the Kerala High Court had stayed the closure of the unit.

Now, it is understood that the Government is looking for another promoter citing that the present prospective promoter was not attending the meetings convened by the Government. Meanwhile, the Coimbatore group said that the only impediment was the non-materialisation of the one-time-settlement with the Indian Bank-led consortium and once that is through it would be able to revive the company. But the State Government has to pursue it seriously, they added.

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