Dunlop Seeks Soft Loan From Bengal

The top brass of the ailing tyre-manufacturer Dunlop India Ltd (DIL) today approached the West Bengal government seeking Rs 25 crore soft loan against hypothecation of Dunlop properties in Kolkata to keep production running under the year-old holding operations scheme alive at the company's plant.

DIL now has four more months to submit the draft rehabilitation scheme (DRS) as the Board for Industrial and Financial Reconstruction(BIFR) has extended the date of submitting the scheme from March 31, to September 30, 2001.

DIL director, Komal Wazir Chhabria and DIL president T C Goel, met Nirupam Sen, West Bengal minister-in-charge for industry, public undertaking & industrial reconstruction, planning & development, at the Writers' Buildings today and sought the state government's help to infuse working capital funds at its factory.

Production at Dunlop's twin factories in Sahaganj, West Bengal, and Ambattur, Tamil Nadu, stopped fully since April 2001 and the workers' last received their salary in January, 2001.

"We have asked the Dunlop management to resume production at its factory at the earliest and arrange for workers' five-month of outstanding wages," Sen told media persons.

"We approached the West Bengal government for soft loans to meet the current working capital crisis," Chhabria said at a press conference.

"We will meet the minister after two weeks to learn about the state's decision on providing soft loan to resume holding operations," she said. Chhabria, however, did not elaborate on what soft options DIL has sought from the government.

Sen said the state government will extend all assistance within its limited resources to help resume operations at the factory.

"If need arises the West Bengal government will sit across the table with the concerned banks and institutions on the matter. I am in touch with the Dunlop trade unions on the matter," he said.

He described the management's attitude as positive but said that the state government will take necessary steps after studying the rehab proposals currently being worked out.

Chhabria said, that Dunlop has formed an asset sales committee (ASC) comprising representatives of BIFR, operating agency IDBI, DIL management, banks and financial institutions, for identifying and working out the modalities for sale of properties across the country.

Under the rehab scheme, DIL will repay banks and FIs Rs 40 crore loans through sale of properties. Also, the liabilities of the company till September 2001 will be incorporated into the new scheme.

"There is a broad consensus with the banks and financial institutions on the new DRS which we have conveyed to the West Bengal government," said Goel.