Financial Daily from THE HINDU group of publications
Saturday, Mar 15, 2003
Financial Daily from THE HINDU group of publications Saturday, Mar 15, 2003 |
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Corporate
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Sick Units Delay in inducting funds — BIFR asks Pearl Engg to seek condonation Richa Mishra
NEW DELHI, March 14 PEARL Engineering Polymers Ltd (PEPL), manufacturers of PET resin, has been instructed by the Board for Industrial and Financial Reconstruction (BIFR) to move an application seeking condonation for delay in inducting funds and issuance of capital for the revival of the company. The BIFR has also directed the monitoring agency (MA) to submit a report within a stipulated time frame on the progress made in the implementation of the sanctioned scheme. PEPL, promoted by Pearl Polymers Ltd, was declared a sick company in 1999 and a rehabilitation scheme was sanctioned in September 2001. The scheme envisaged induction of Dinesh Kothari & Associates as strategic investors besides writing down of share capital. The cost of the rehabilitation scheme was estimated at Rs 24 crore mainly towards payment of dues to be funded by equity share capital of Rs 15 crore and fresh working capital of Rs 9 crore. The company's net worth was expected to become positive after the restructuring and accumulated losses were wiped out by 2007. At the last review hearing, the Bench noted that there was delay in the payment of instalments, working capital had not yet been tied up and the new promoters had not inducted the funds in full. At the recent hearing, the Bench observed that the continuation of scheme was dependent on Mr Kothari bringing in the funds and working capital arrangement being tied up. The BIFR Special Director, Mr Chander Shanker, reported that Mr Kothari had inducted Rs 5 crore and the company had paid instalments up to August 2002, along with interest for the delayed period. He further submitted that the company had approached the banks for revised repayment schedule. ICICI submitted that against the total dues of Rs 22.5 crore under the scheme, the company had paid Rs 15.7 crore. The strategic investor Dinesh Kothari was required to induct Rs 10 crore, 50 per cent within three months of sanction and the balance in one year. According to ICICI, Rs 5 crore had been already been inducted and the balance Rs 5 crore would be inducted in a phased manner by August in line with the revised payment schedule. Mr Chand Seth, Chairman-cum-Managing Director of the company, submitted that they were developing new products for the export market, as also for the domestic sector and the company expected to get an edge over other suppliers.
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