TN Tele recovery plan set to get BIFR nod

Tamil Nadu Telecommunication Limited (TTL) has said that the Board for Industrial and Financial Reconstruction (BIFR), at a hearing held on June 24, approved its draft rehabilitation scheme (DRS) and an order to this effect is expected in two weeks' time.

The company had made a reference to the BIFR in October 2004 when its accumulated losses exceeded its net worth at the end of the financial year 2003-04. BIFR declared the company industrially sick, following which a draft rehabilitation / revival scheme has been submitted.

The company has since embarked on an exercise to improve its operational and economic performance which included restructuring of operations, cost control, corporate debt restructuring and other measures.

In FY 2009-10, TTL, whose primary business was manufacture of telephone cables, reported a net loss of Rs 2.10 crore as compared to Rs 7.45 crore a year ago. During the same period, the company's loan funds were Rs 62.85 crore, which includes reserves and surplus of Rs 9.9 crore and capital of Rs 22.66 crore.

The Union Cabinet in its meeting held on August 20, 2009 approved the additional investment by Telecommunications Consultants India Ltd (TCIL) in TTL, increasing the latter's holding from Rs 6.95 crore to 22.38 crore. TCIL is a public-sector telecommunication consultancy and engineering company operating under the Ministry of Communications and Information Technology.

Once the proposed revival package is approved, the equity percentage of TCIL shall go up to 49 per cent which amounts to conversion of loans to equity to the extent of Rs 15.43 crore. This includes restructuring by banks of loans which are pending.

The Union Cabinet also gave its approval to authorise TCIL to provide Rs 12.5 crore as bridge loan till loans from banks are organised. A major portion of this loan is towards one-time settlement of consortium bank loans.