Iibi Charts Out Rs 125cr Revival Plan For Burn
A revival package of Rs 125.25 crore has been proposed for the ailing public sector undertaking Burn Standard Ltd. The proposal has been made by the company's operating agency, Industrial Investment Bank of India (IIBI).
IIBI has proposed a total capital investment of Rs 63.31 crore out of which Rs 18.61 crore is to be invested in the Howrah division of the company. While Rs 13.60 crore would be pumped into the Burnpur division, Rs 21 crore would be invested in the Salem division, Rs 6 crore in the Lal Kuthi division and Rs 4.11 crore in the Niwar division.The margin for additional working capital has been fixed at Rs 5.27 crore while pressing payments stand at Rs 25.25 crore. The cash loss in the first year of operation after the implementation of the revival package, as estimated by the IIBI proposal, would be Rs 8.41 crore. The outgo for the voluntary retirement scheme (VRS) has been fixed at Rs 23 crore . Speaking about the source of funds for the revival package, a company source told ----- Business Standard ----- that the government is expected to pump in Rs 21.41 crore through equity and around Rs 21.41 crore as loan.
While Rs 33.48 is expected to come in the form of non-planned loan, Rs 23 crore would come from the national renewal fund (NRF).
About Rs 2.79 crore is expected from the company's own funds in the second year of its operation. The balance Rs 2.67 crore would come in the form of sales tax concession. IIBI has also recommended the closure of five units of the company. "The operating agency has proposed that the number 2 refractory of the Raniganj group, the Durgapur refractory, the Gulfurbary unit in Bihar, the Andal unit and the Jabalpur refractory be closed," said the source.
IIBI has also recommended that the offshore division be converted into a project division and be run under the engineering division of Burnpur. The earlier proposal of shifting this project site to Durgapur has now been ruled out, the source added. The next BIFR hearing of the company is scheduled for October 17.
Earlier, M N Dastur & Company had proposed that the offshore division be converted into a project division, and operate in the fields of ship breaking and tank farm projects. The project cost of this proposal was calculated at Rs 194.59 crore.
In the second proposal, M N Dastur & Company had worked out a package of Rs 343.59 crore. IIBI finally scaled down and modified the package to the current level of Rs 125.25 crore.