One of the directors of the NRI group has already visited the plant and the corporate office of Mysore Acetate. The Karnataka government is believed to have fixed Rs 25 crore as the price for the company's chemicals unit in Mandya. The company has a liability of Rs 5 crore towards banks and other financial institutions.

The bid was submitted to the State industries and commerce department through the nodal agency Karnataka State Investment & Industrial Development Corporation (KSIIDC).

Talks were also on with SBI Caps which would play an active role to find a prospective suitor. The plan for the disinvestment of Mysore Acetate was announced on March 31, 1997.

A top government official said Keerthi & Co(Bangalore) Pvt Ltd has also submitted its bid to bail out the state-run company. However, the NRI group's bid has already been tabled before the industries and commerce department. But the forthcoming Lok Sabha elections would throw a dampener on the process of finalising the partner, he added.

Interestingly, Somaiya group and Vam Organics of Mumbai, which have shown interest in Mysore Acetate, have decided not to go ahead with their earlier decision.

"Preliminary talks with these companies were not fruitful since the industry department did not reach a consensus on the price," a top company official said.

Mysore Acetate, which is in the Board for Industrial and Financial Reconstruction (BIFR) net, is facing a severe financial crunch with no money even to pay its 45 remaining staffers salaries.

Over the last few months, the company retrenched its 422 odd employees through a voluntary retirement scheme for which it had received an assistance of Rs 5 crore from the State government.

The companyofficial said Mysore Acetate currently requires around Rs 6 lakh per month to meet its expenses. But the state government is reluctant to extend any aid at this point of time. "We are not in a position to meet the expenses on gratuity settlement which was supposed to be done in April itself," he added.

Mysore Acetate has a manufacturing facility in Mandya to produce cellulose tri-acetate, cellulose acetate moulding granules, cellulose acetate, acetic anhydride and bleached and unbleached cotton linters. After the infusion of additional funds by the government, the paid-up capital of the company rose to Rs 12.2 crore from the earlier Rs 8.67 crore. The state government has around 76 per cent stake in the company.