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Revival recipe for MCFL sanctioned

Richa Mishra

NEW DELHI, Dec. 8.

THE Board for Industrial and Financial Reconstruction (BIFR) has sanctioned a rehabilitation scheme for Mangalore Chemicals and Fertilisers Ltd (MCFL), promoted by UB Group. Also, the Industrial Development Bank of India (IDBI) has been appointed as the monitoring agency (MA) to review the progress of implementation of the sanctioned scheme.

The scheme envisages a one-time settlement (OTS) with institutions (Rs 80.14 crore), banks (Rs 143.96 crore) and leasing companies (Rs 27.87 crore), repayment of Government of Karnataka loans (Rs 5.67 crore) and capital expenditure of Rs 175 crore.

The scheme is to be implemented over a period of six years from 2000-2006. The total cost of the scheme will be Rs 491.01 crore, including the waiver on the part of the institutions, banks and other agencies aggregating Rs 192.91 crore. The requirement o f funds till March 31, 2001, will be Rs 298.10 crore.

It has been funded by deposits with IDBI and banks (Rs 141.36 crore), promoters' contribution of Rs 20 crore already brought in through a ``no lien'' account, interest on deposits with institutions and banks Rs 42.11 crore, banks' finance for working cap ital (Rs 50 crore), refund of portfolio funds Rs 4.76 crore and internal accruals of Rs 39.87 crore.

The net worth of the company, as per the scheme, will become positive by 1999-2000 and the accumulated losses will be wiped out by 2000-2001.

The company proposes to come out with a VRS for the workers. MCFL will also arrive at a long-term understanding with the workers' unions on the issue of manpower rationalisation and sacrifices.