BIFR for new management in Gujarat Perstorp

	Financial Daily from THE HINDU group of publications Wednesday, January 19, 2000

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BIFR for new management in Gujarat Perstorp

Richa Mishra

NEW DELHI, Jan. 18

THE Board for Industrial and Financial Reconstruction (BIFR) has directed Gujarat Perstorp Electronics Ltd (GPEL) to show-cause why the Board should not initiate measures for change in management.

``... Since the company and the promoters had not been able to come up with an agreed settlement with the involved institutions. In the event of no satisfactory replies being received, the bench would be left with no alternative but to go ahead with chan ge in management,'' the order said.

The Bench noted that GPEL, jointly promoted by Apollo Tyres Ltd (ATL) and Gujarat Industrial & Investment Corporation (GIIC), was declared as a sick company in August 1997 and a draft rehabilitation scheme (DRS) was formulated and circulated in October 1 999. The recent hearing was held to consider objections and suggestions to the DRS.

According to the DRS, the cost of the scheme had been estimated at Rs. 29.31 crores. The promoters had raised certain objections to the payment of the one-time settlement (OTS) amount and the institutions expressed their unwillingness to accept the conte ntions of the promoters for payment of the OTS.

Besides, the Gujarat Government and the Department of Income-Tax (Recovery) had not given their consent to the reliefs and concessions envisaged from them in the DRS, the Bench noted. Finding that there was no meeting ground between the institutions and the company regarding the scheme, the Bench did not sanction the scheme, the order said.

The Bench also noted that GPEL and the promoters will be free to further negotiate with the secured creditors and banks to come forward with an unambiguous and fully tied-up proposal, indicating the time frame and the modalities for OTS payment.

Further the company has been directed to hold discussions with the Gujarat Government and the Department of Income-Tax (Recovery) in order to convince them and secure their consent regarding the reliefs and concessions envisaged from them.