BIFR approves telecom co's rehabilitation plan

Tamilnadu Telecommunication Limited (TTL) has said that the Board for Industrial and Financial Reconstruction (BIFR), at the hearing held on June 24, 2010, approved the Draft Rehabilitation Scheme (DRS) of the company and the order of BIFR is expected in two weeks time. Company’s primary business was manufacturing of telephone cables.

It may be noted, the company had made a reference to the BIFR in October 2004, of the fact that the accumulated loss of the company at the end of the financial year 2003-04 exceeded the entire net worth of the company.

BIFR has declared the company as industrially sick. A draft rehabilitation ô revival scheme has been submitted to BIFR.

During the year ended March 31, 2010 the company has reported a net loss of Rs 2.10 crore as compared to Rs 7.45 crore, a year ago.

The accumulated losses of the company had exceeded its net worth. The company had embarked on an exercise to improve the operational and economic performance of the unit. This included restructuring the operations, cost control, corporate debt restructuring and other measures.

As on March 31, 2010 company’s loan funds is Rs 62.85 crore, this includes reserves and surplus of Rs 9.9 crore and capital of Rs 22.66 crore.

In 2009, Government of India had decided to help the company by enhancing its share capital. The Union Cabinet in its meeting held on August 20, 2009 has approved the additional investment by Telecommunications Consultants India Ltd (TCIL) in equity of TTL. TCIL is a public sector telecommunication consultancy and engineering company operating under the Ministry of Communications and Information Technology,

According to company’s announcement on NSE in 2009 “the Cabinet has approved to enhance the equity share capital of TCIL in its joint venture company, Tamilnadu Telecommunications Limited (TTL) from Rs 6.95 crore to Rs 22.38 crore”.

The equity percentage of TCIL shall go to 49 per cent, which amounts to conversion of loans to equity to the extent of Rs 15.43 crore, once the total proposed revival package of TTL is approved which includes other restructuring by Banks also which are pending.

The Union cabinet also gave its approval to authorise TCIL to provide bridge loans to the extent of Rs 12.5 crore till loans from banks are organised.

Major portion of this loan is towards one time settlement of consortium banks loans, said in the announcement.