The Hindu : Business : Travancore Rayons scouting for new promoter

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Thursday, Mar 05, 2009
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Travancore Rayons scouting for new promoter

R. Ramabhadran Pillai

The company, with over 1,000 workers, has been in the midst of a crisis

The unit has incurred a cumulative liability of over Rs.200 crore
The new move has brought a fresh sense of optimism

KOCHI: Travancore Rayons Limited, a Perumbavooor-based company that has remained closed for several years, is scouting for a promoter to takeover the company. The company with over 1,000 workers had been in the midst of a crisis after two attempts for takeover failed to materialise.

The issue had come up before the Board for Industrial and Financial Reconstruction, a statutory board for winding up of sick industrial units and was later referred to the High Court. The government was given six months time to initiate steps to revive the unit. The present move to find out a suitable promoter is being initiated in this context.

The unit had incurred a cumulative liability of over Rs.200 crore. This includes loans and interest, apart from overdue taxes, electricity charges and workers’ benefits. While the government, having about 30 per cent stake in the unit, had been willing to waive dues on account of electricity charges and taxes, the interest on the loans taken from public sector banks and financial institutions had been mounting. Though attempts were made in the past to find out a one time settlement, there was no consensus on the amount of liability to be borne by the partners.

Though the machinery may not be in working condition, there are several advantages for entrepreneurs who want to start production of new material within the framework of the renewal package.

The spacious premises on the Periyar river banks could be one of the most attractive natural locations for a prospective venture. All the trade unions have joined hands in support and it would be of immense help to the promoter to chalk out strategies for revival.

The government is also expected to adopt a stand much favourable for the smooth operation of a revival package, especially in the wake of the pressure from the workers.

The new move has brought a fresh sense of optimism among the workers as well as the trade unions. They exude confidence that the effort will bear fruit and the unit will emerge once again as a prestigious enterprise in central Kerala.

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