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Kerala to provide Rs 6 cr to TRL

G.K. Nair

KOCHI, June 4

THE Kerala Government will keep the sick Travancore Rayons Ltd (TRL) at nearby Perumbavoor alive by pumping Rs. 6 crores into the unit which has an accumulated loss of Rs. 74 crores as on March 31, last.

The Government had agreed to provide the Rs. 6 crores asked for by the company. This included unfunded portion of a working capital required for additional operations to the tune of Rs. 4 crores, Mr. Jayaprakash, Managing Director, of the company told Bu siness Line.

He said the banks were not providing sufficient working capital from 1994, even though they were realising interest on term loan from ``this bleeding company''. They had realised about Rs. 17 crores from TRL from 1994 and this was against BIFR directive, he said.

During this period, the Government had funded the company with Rs. 8.7 crores, he said. The company made a loss of Rs. 12 crores last fiscal of a total sales turnover of Rs. 40 crores, he said. Currently, 27 per cent of the total turnover was absorbed by labour cost. The company required a turnover of Rs. 65 crores to break-even, he pointed out.

Given the favourable market conditions, the unit had the potential to come out of the crisis, he said.

The State Industry Minister, he said, had told at a public meeting on May 27, that if the banks did not come forward to provide working capital to the company, the Government would explore the possibilities of making available funds from the co-operative banks.

He said the Minister had assured that the Government would not allow the company employing around 2,000 people to be closed down.

However, a meeting held later by the Minister, with the consortium of the banks lead by Indian Bank (consortium leader), was understood to have ended without any positive outcome.

IDBI was already on the job of finding a promoter for the company under BIFR directive. The rehabilitation plan presented by the Kerala State Industrial Development Corporation (KSIDC), proposed a one-time settlement with the financial institutions by th e prospective promoter.

According to department sources, the principal amount stood at Rs. 18 crores and on a one-time settlement, the financial institutions might forego the interest component.

The actual assets of the company revalued recently stood at Rs. 75 crores as against the total paid up share capital of Rs. 4.75 crores, they pointed out.

The Government had also extended the lease of 75 acres of land on the banks of Periyar river to another 99 years, they said. TRL was declared sick by BIFR in 1986 and it had appointed IDBI as the operating agency. The Kerala Government was playing the ro le of the promoter since 1989.