5-Member Panel To Be Set Up For Metal Box Bailout

The banks and financial institutions (FIs) of the ailing Metal Box (India) Ltd (MBIL) have agreed to set up a five-member committee comprising Metal Box's operating agency, ICICI, IDBI, lead bank State Bank of India, BIFR and the company's management.

The panel is expected to hasten MBIL's rehabilitation scheme by expediting the sale of its Worli property through open tender and some new proposals. The scheme had run into a controversy over different valuations of the company's Worli property.

The banks and FIs' proposals are likely to be placed at the company's court hearing on July 31 at the Delhi high court.

Banking sources said that efforts are on to involve the Maharashtra government, whose clearance will be required to decide on the nature of the sale of the property. Commercial use of the property is expected to fetch a higher price than industrial use for which the government's clearance is a must. The government has so far not given an official clearance on the property sale.

ICICI had appointed two independent valuers, HDFC and Batliboi & Co Ltd, to assess the value of the property. HDFC had pegged the value at Rs 64.48 crore while Batliboi had quoted it at Rs 43.39 crore. MBIL's management had worked out a rehabilitation plan based on Batliboi's valuation which was rejected by most of the banks, SBI and Syndicate Bank in particular.

For the past two years, repeated meetings between the management, banks and institutions had failed to evolve a consensus on the company's rehabilitation scheme.

The banks and FIs have also agreed on the fact that the company's management should submit to the court a list of property it had in 1988 when it was referred to the BIFR.

The banks are also pressing for the fact that the promoter's contribution should be increased from Rs 24 crore to Rs 30 crore in the bail-out package.

Also, all further dispensation and sale of properties should be carried out through an asset-sale committee, which would include representatives of banks and institutions.