"ABG has been defaulting on loans provided under the asset credit scheme for over a year. Hence, IDBI was forced to take the drastic step of recalling the loans," said institutional sources. IDBI had disbursed loans worth Rs 32 crore during 1995-97 for the purchase of mobile cranes. At that time, demand for mobile cranes was very high. During the last one year, demand has waned considerably, especially after the commissioning of Reliance Petroleum's project in Jamnagar. This has caused a delay in repayments, a top ABG official admitted. According to him, ABG has paid Rs 23.04 crore (including Rs 12.65 crore as interest) to IDBI so far, and the balance is around Rs 21.90 crore.Overdues amount to Rs 3.32 crore.

With IDBI issuing a loan-recall notice, there are two options available to the company. One is to sell the cranes and make the payment, the other is to wait for some mega projects to start activity, the official said.

Industry sources said that the first option may not be easy to work out since there are few takers for mobile cranes owing to poor market conditions. ABG earned more than 60 per cent of its total income during 1998-99 from long-term contracts for the deployment of container-handling and bulk-handling equipment in major ports in the country. It recently secured an order for the deployment of a rubber-tyred gantry crane at Kochi port for 10 years.

ABG Goa Port, a wholly-owned arm of the company, has signed a licence agreement with the Mormugao Port Trust for the construction and operation of two multipurpose bulk cargo berths at the port on a build-own-operate-and-transfer basis for 30 years.

It is believed that a minority stake in the equity of the newcompany will be offered to an overseas company and the negotiations have reached an advanced stage.