SMZS Chemicals managing director Vivek Shetty told The Financial Express: "SMZS has been talking to ICI India for the sale of assets but nothing has been finalised yet."

The company, a 40:40 joint venture between German company Zsesimer Scswarz and the SM group, has valued the assets at Rs 27 crore and the proceeds from the sale will be utlised to repay outstanding libailities with banks and institutions. State Bank of Hyderabad and Sicom are the major lenders to the company, merchant banking sources said.

The company's strategy is to partially exit from specialty chemicals and concentrate on glycol business. Its plant at Taloja, Maharashtra, manufactures glycol ethers.

ICI India, the paints and chemicals major,on the other hand has major plans to expand its speciality chemicals operations in the country. Internationally, the British parent has identified the business as a core area of operations and has acquired Unilever Plc's specialty chemicals business worldwide for $8 billion.

In India, it planned to forge a joint venture with Hindustan Lever but, as reported in The Financial Express earlier, it has now decided to go it alone after talks were deadlocked over two crucial issues of price and shareholding.

SM Dyechem, the flagship of the SM Shetty group, is also mired under financial crisis and has put its mono-ethylene glycol plant on the block. The company has submitted a rehabilitaion proposal with the institutions under which plant excluding land, building and mini boilers will be sold for Rs 274 crore, for which payment was to come only in the 9th, 10th and 11th years on an interest-free basis.

Of the total proceeds, Rs 218 crore was to be utilised by the company to clear its institutionalliabilities and the remaining to settle borrowings from banks on a pro-rata basis.

A consortium of banks led by State Bank of India (SBI) has rejected the rehabilitation proposal of SM Dyechem as it was "not satisfied" with the unduly long repayment period and a complete waiver of interest charges.