Pnb Refuses Working Capital To Ailing J K Jute Mills

The banks decision has derailed the Board for Industrial and Financial Reconstructions (BIFR) rehabilitation and modernisation plans for the company and is likely to prolong the uncertainty over the future of the company. JK Jute has been making continuous losses the past several years.BIFRs rehabilitation scheme for J K Jute had provided for various reliefs and concessions on the part of the financial institutions including IFCI, ICICI and IRBI, and PNB besides the central and state governments.

A source said PNB has shown reluctance to grant need-based working capital and term loan as envisaged in the scheme. The implementation of the scheme, is hence, delayed as the company has sought certain clarifications from the BIFR on account of PNBs reluctance to grant working capital, the source said.A response from the PNB on the matter could not be ascertained.

 

J K Jute Mills has an accumulated a debt burden of about Rs 27 crore. At the end of the 1995-96, its secured loans stood at Rs 5.02 crore, unsecured loans at Rs 1.25 crore and current liabilities soared to Rs 21.52 crore.

The Kanpur-based company, which was shut down in March 1994 following unprecedented losses, was reopened in September 1995. During the 1995-96, the company had a Rs 15.72-crore deficit in profit and loss (P&L) account against a share capital of Rs 90.28 lakh. It incurred a loss of Rs 4.15 crore in the year.