The Board for Industrial and Financial Reconstruction (BIFR) has declared the Hyderabad-based ICSA (India) Ltd a sick entity and asked it not to dispose of any of its assets without its permission.

It appointed State Bank of India to prepare a rehabilitation scheme for the ailing company.

The company, which provides technological and infrastructure solutions to power sector, has been ailing for a while, constrained by working capital needs.

ICSA Chairman and Managing Director Bala Reddy told this paper that the company moved the BIFR after the ₹480-crore corporate debt restructuring (CDR) plan failed to fructify.

Operating agency Passing the order, BIFR directed the company to prepare a draft rehabilitation scheme in six weeks and submit it to the SBI, which has been appointed Operating Agency under the Sick Industrial Companies (Special Provisions) Act.

The Operating Agency would examine the DRS and hold a joint meeting of all the stakeholders to consider it. The board issued a set of guidelines and checklist to prepare the scheme. The next date of hearing will be held on May 12, 2014.

Woes

Riding on power sector reforms in the country that seek to bring in radical changes by using IT solutions, the company emerged as a strong contender for various projects announced by State and Central power utilities.

Turnover slumps G Bala Reddy had claimed that the banks had agreed for a CDR but backed off. He said the company had made a failed attempt to get a restructuring plan again. It sacked 1,300 employees, continuing operations with a skeletal staff.

The turn of events have a telling impact on the numbers. In the third quarter ended December 31, the company’s turnover fell to ₹10 crore from ₹90 crore in the same period previous year and losses mounted to ₹33 crore from ₹23 crore during the period.

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