G.K. Nair

Kochi, March 7

THE Kerala Chief Minister, Mr Oommen Chandy, is understood to have proposed at a high-level meeting to arrange a loan of Rs 20 crore from the profit-making public sector Kerala Minerals and Metals Ltd (KMML) for reviving the ailing Autokast Ltd at Chertalai, a state-owned company.

The Chief Minister had suggested taking the loan from another public sector at the meeting attended by Ministers for Power, Finance and Industry and trade union leaders recently.

The amount could be used for clearing outstanding dues to the KSEB and reaching a one-time settlement with banks, a trade union leader who had participated in the meeting told Business Line. If such a loan was made available, the revival package put forward by the expert committee could be implemented, he claimed.

He hoped that the CM's proposal would be translated into reality soon.

Meanwhile, the State Government has already filed an appeal before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) against the order of the BIFR to wind up the unit.

The issues that were discussed included one time settlement with bankers, deferment of payment of interest to Kerala Industrial Revitalisation Fund, concession for power, handing over of the company's 110 KV sub station to the KSEB and making available working capital, he said.

He said that since the Government has decided to freeze the recommendations of the Enterprises Reforms Committee (ERC), which had recommended closure of the unit, the Government might not consider closing the public sector unit now.

He said that a "viable project proposal" prepared by an expert committee constituted by the SPATO, an organisation of the officers of public sector units and autonomous bodies in the State, was submitted to the State Government in November last. "The employees of the company have pledged their wholehearted commitment and active support for the implementation of the proposal," he said.

In fact, the ERC, upon evaluation of the physical and financial performance of the company, had recommended privatisation of the unit, with management control to strategic investors, he pointed out.

The company with a paid-up capital of Rs 17.97 crore had an accumulated loss of over Rs100 crore and a negative net worth of Rs 88.70 crore as on March 31, 2002. The closure of the company would render 342 employees jobless.

The Board for Industrial and Financial Reconstruction (BIFR) had ordered on September 30, 2004, that the company Autokast Ltd "should be wound up u/s 20 (1) of the Act" following expiry of the two months time given to the promoters of the company to submit a detailed revival scheme.

Having forwarded the Bench's opinion to the Kerala High Court, it has directed that the company should not dispose of or alienate in any other way any of its fixed assets or current assets till such time as an official liquidator was appointed by the High Court and he took over charge of the same for further disposal according to law.

(This article was published in the Business Line print edition dated March 8, 2005)
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