On the other hand, the financial institutions find the promoter's proposal favourable but there is a rider. The FIs intend to take the drastic step of pressing for a change in the management as they cannot go ahead with the revival plan without the backing of the banks, said banking sources. The financial institutions - IDBI, ICICI and IFCI among others - have a combined stake of 14 per cent in the company.

The rehabilitation proposal envisages the sale of the assets of the company's monoethylene glycol (MEG) plant excluding land, building and mini boilers to Reliance Industries (RIL) for a sum of Rs 274 crore, for which payment was to come only in the 9th, 10th and 11th years on an interest-free basis.

Out of the total proceeds, Rs 218 crore wasto be utilised by the company to pay off the institutional liabilities and the remaining Rs 56 crore to settle the borrowings from banks on a pro rata basis. The consortium had 11 banks which included SBI, Canara Bank, Vijaya Bank and Bank of Baroda.

The proposal also said that the company's two other units--foods and soya--could be revived over a period of five years.

The consortium is not ready to accept the offers in its present form, said an assistant general manager at State Bank of India's recovery & rehabilitation branch in Mumbai.

A senior official at SM Dyechem refused to comment on the issue but said that plant was not in operation for the last one year.

Since banks have officially communicated that the propsals are unacceptable to them, institutions are planning to communicate to the Board for Industrial & Financial Reconstruction (BIFR) that only by changing the management the company can be revived, sources said.

The proposal was placed before the banks and institutions in June forapproval after Reliance had shown enthusiasm to takeover the assets at the initiative of ICICI.

Banking sources say that the takeover is stuck because of the consortium's objections. However, RIL, it is learnt, has lost interst in the deal.

Hit by decontrol of molasses and a consequnt erosion in MEG prices, the company has suspended operations at its glycole unit at Kurkumbh, near Pune, which has a capcaity of 60,000 tpa by March 29 1996. The plant started commercial production in March 1996.