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Mysore Lamps up for sale

Our Bureau

BANGALORE, Dec. 14

THE Karnataka Government has decided to float a global tender to sell the Mysore Lamp Works Ltd. (MLW), a sick State public enterprise, which has run up an accumulated loss of Rs 47 crore.

If the Government fails to succeed in getting suitable investors, it would wind up the operations of the company after working out a suitable compensation package to the employees. MLW, one of the oldest enterprises in the country, has been suffering fro m the recessionary trend and severe competition.

The Minister of State for Information and Publicity, Mr B.K.Chandrasheker, told newspersons here that this was the decision taken at the Cabinet meeting held here. He did not give a clear picture about the time frame within which the decision could be im plemented, but said it could take three months or more.

The company has already been referred to the Bureau for Industrial and Financial Reconstruction (BIFR), which is yet to give its approval to a Rs 19.91 crore rehabilitation package. The efforts to revive the company through the package had hit the roadbl ock with the banks and financial institutions expressing their inability to provide additional term loans, thus reducing the hope of meeting the cost of rehabilitation.

Under the package, the Government of Karnataka was to contribute Rs 5.03 crore as equity and Rs 3 crore as grant for Voluntary Retirement Scheme to rationalise the workforce. The banks and the FIs are understood to have suggested a revised package under which the State Government could reduce its equity contribution, provided the payment of their loans was guaranteed as and when due.

Though the company has hit a bad patch, it showed a modest recovery during 1998-99 when it reduced its loss by about eight per cent to Rs.10.34 crore from Rs 11.25 crore. It registered only a marginal increase in its net sales and other income at Rs 57.7 9 crore from Rs 57.37 crore in the previous year (199798).

The marginal reduction in the loss was mainly attributed to the reduction in the interest by about 28 per cent as a result of conversion of the State Government's loans into equity., non-provision of interest on deferred sales tax and lower utilisation o f cash credit limits with bankers.