Best & Crompton May Be Referred To Bifr

Best and Crompton, the beleaguered city -based engineering company, is likely to be referred to the Board for Industrial and Financial Reconstruction (BIFR), with the workers, banks and the new promoters sticking to their guns in an uncompromising stand-off.

The court-appointed administrator and former Reserve Bank of India governor S.Venkitaramanan will now have to seek the court's permission to refer the company to the Board for Industrial and Financial Reconstruction as the company has no money to meet its monthly wage payments.

Unsecured creditors of the company, it may be recalled, went to court to recover their dues. In an attempt to find an amicable solution, the Madras High Court had appointed an administrator to mediate in the issue.

 

It is reliably learnt that the Indonesia-based Polysindo group, which was willing to pump in money and revive the company, is now having second thoughts about the venture.

About $ 10 million was kept in an escrow account by the promoters for the last three months, and they are not willing to wait any further, says a top source.

The Rs.103-crore revival package put forward by Polysindo found favour with only about half (the foreign banks) the company's creditors.

Similarly, the workers found the VRS package unattractive, and those who opted for it were far less than that anticipated by the promoters. While the workforce was to be reduced by atleast 370, only 140 had accepted the golden handshake till yesterday, the last day for opting for the scheme.

The company has about 1000 workers on its payroll.

The union had even written a letter yesterday to the administrator to prevent Polysindo from seeking state government permission to retrench about 250 workers.

It is being said that with all these efforts failing, there is no option but to refer the company to the Board for Industrial and Financial Reconstruction.