The state-owned Meltron's accumulated losses have risen to Rs 21.52 crore in March 1998 wiping out its net worth. The annual sales had declined from Rs 84.08 crore in 1993-94 to Rs 19.90 crore in 1997-98.

Mantralaya sources told The Financial Express that R&S Bick has already signed a memorandum of understanding (MoU) with Octopacy Exports for a prospective tie-up to pick up the Meltron stake. The Rhodes & Schwartz subsidiary is also willing to pick up an additional 23 per cent stake in the ailing state government undertaking taking its total stake to 74 per cent, Mantralaya sources said.

R&S Bick is a leading manufacturer of mobile radio while Octopacy Exports is involved in the production and exports of electronic toys and consumer electronics. Meltron produces recording and broadcastingequipment for All India Radio, Doordarshan, Indian Airforce and Navy and International Airports Authority. It is also engaged in production of EPABX system, walkie-talkie sets, fire-alarm systems and electronic panels for telephone exchanges.

The two units of the state undertaking--located in Mumbai and Aurangabad--employ a 800-strong workforce.

The state cabinet sub-committee will soon discuss the R&S Bick proposal. If accepted, it will draw curtains on the state government's two-year old search for a `white knight' for the loss-making unit.

The government's attempt to sell off 51 per cent stake in Meltron did not pay-off as the lone bidder, Natalco, withdrew in early 1998. The withdrawal followed the government's refusal to offer 15,000 sqaure feet prime space in south Mumbai, occupied by the Meltron office, as a part of the package. The space, leased out to Meltron, belonged to a trust, run by close associates of Shiv Sena chief Bal Thackeray. Subsequently, the government changed the bid documentexcluding the Rs 8 crore worth of office space.

The state industry, finance and planning departments are believed to be willing to accept the R&S Bick proposal provided the company ensures the job security of the existing Meltron staff. Besides, the promoter will have to make a reference to the Board for Industrial & Financial Reconstruction (BIFR).

R&S Bick's revival proposal envisages completion of existing orders worth Rs 15 crore and improvement of technical, financial, commercial and administrative conditions. It also includes development of consumer electronic goods in future, act as Internet service provider and set up a R&D centre.

The revival package also includes search for a partner at the world level for the marketing of Meltron products.