Financial Daily from THE HINDU group of publications
Saturday, May 18, 2002
Financial Daily from THE HINDU group of publications Saturday, May 18, 2002 |
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Corporate
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Sick Units BIFR sanctions Rs 38-crore revival scheme for AB Corp Richa Mishra
NEW DELHI, May 17 BIG B's entertainment company, AB Corp Ltd, seems to be on the path of revival. The Board for Industrial & Financial Reconstruction (BIFR) has sanctioned a Rs 38.06-crore rehabilitation scheme for the ailing Amitabh Bachchan Corporation Ltd (ABCL) now known as AB Corp Ltd. ABCL, engaged in production of audio cassettes, TV serials and films, as well marketing of audio cassettes, event management, celebrity management and host of other entertainment business, was declared a sick industrial undertaking in 1999. "The sanctioned scheme has been prepared based on the revised rehabilitation proposal submitted by the company,'' the Bench observed. The cut-off date for the scheme would be September 30, 2000. The scheme envisages that the installed capacity of the audio cassette division would be increased from five lakh pieces to 15 lakh pieces per annum by incurring capital expenditure of Rs 1 crore. ABCL would also produce one mega size and one medium size movie each year. The cost of film production is estimated at Rs 17 crore including Rs 10 crore for the mega movie and Rs 7 crore for the medium size movie. Additional working capital requirement during the optimum year for audio division is estimated at Rs 50 lakh, which has been provided in the cost of the scheme. The promoters of the company propose to induct Rs 15.52 crore in the form of unsecured loans as their contribution to part-finance the scheme. The promoters' contribution of Rs 15.52 crore works out to about 41 per cent of the cost of the scheme. This amount is over and above the Rs 31.54 crore already inducted by the promoters in the form of unsecured loans to make various payments under one-time settlement (OTS). Further, the other salient features of the scheme are: The payment of Rs 37.26 crore made by company, before the cut-off date, to various creditors under OTS has not been included in the sanctioned scheme; and the dues of Prasar Bharati and UTV (United Television) would be settled under the OTS arrangement as also dues to various other creditors would be paid as per mutually agreeable terms. IDBI has been designated as the monitoring agency (MA). During the implementation period, the company is projected to incur a net loss of Rs 2.22 crore on a turnover of Rs 0.57 crore. The company would start earning profit after implementation of the scheme and production of films.
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