The Hindu Business Line : Trayons promoters sign OTS pact with IDBI Bank

THE stalemate in reviving the sick Travancore Rayons Ltd (TRL) at nearby Perumbavoor seems to have been broken with the promoters reaching a one-time settlement (OTS) with the operating agency, the IDBI Bank.

The Coimbatore-based NDEE group has arrived at a settlement with the Bank, the main financial institution functioning as the operating agency for the company, according to Mr P.V. Sukumaran, Joint Convener, Rayons Samrakshana Samithi.

Final clearance from the IDBI board of directors is expected shortly, he said adding, "with this the revival efforts of TRL have put a step ahead and settlement with other financial institutions/banks would follow soon".

Having convinced by the revival package offered by the promoters for re-opening the unit, the State Government had signed an agreement with the former in July 2004. But, the promoters were unable to reach an OTS so far with the Bank and hence the revival of the unit has been pending. With the OTS now things could move in the right perspective, a senior official source told Business Line on Wednesday.

Promoters to settle dues: As per the agreement signed between the Government and the promoters, all the loan liabilities including those taken by the company under Government guarantee would be taken over by the promoters and would be settled through OTS. Similarly, all the dues to the State Government and government agencies would have to be settled. Government concessions and benefits include permission to pay the electricity charges and sales tax in instalments and assistance and cooperation for setting up of new hydroelectric projects, he said.

Revival plans: According to the revival proposal, the promoter is to invest Rs 530 crore spread over a period of five years for modernisation of the company, they said.

In the first year, the promoter would invest Rs 60 crore for renovation of the existing plant. All the old machineries would be phased out in three years, he added.

Inordinate delay impacts: The inordinate delay in concluding the OTS had resulted in a cascading effect on settlements on various other issues, which in turn had prolonged the re-opening of the company, union leaders alleged. The Regional Provident Fund Commissioner had already notified that it would auction some of the properties of the company for recovering Rs 1.97 crore outstanding from the company towards PF contributions of its employees.

In fact, BIFR had ordered the closure of the sick unit in 2002 stating that the proposal submitted by the promoters was just a list of demands. However, the State Government having convinced had accepted the package and pushed it ahead and got the closure order stayed by the Kerala High Court.

The company is under lay-off for over two years now and about 1,200 workers are without wages. At present, the unit is maintained by a skeleton staff of 70 people on a monthly wages of Rs 750, official sources said.

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