Ethurajan Group Submits New Revival Plan To BIFR

Chennai, Aug 30: | Updated: Aug 31 2002, 05:30am hrs
The Chennai-based Ethurajan Group, promoter of the beleaguered Binny Ltd, has submitted a new revial plan before the Board of industrial and Financial Reconstruction (BIFR) for its consideration. The proposal was submitted to the BIFR on August 28.

Based on the proposal, BIFR is expected to convene a meeting of all the stake holders of one of the oldest textile company in the country including IDBI and Indian Bank to consider the proposal.

Sources in the know told FE that the new proposal was submitted following a fresh directive by BIFR asking the promoters to submit a new plan on or before August 28.

The directive came in the wake of BIFR spiking an earlier proposal submitted by the promoters.

Management sources, while contacted confirmed the development. But they refused to throw any further light into the new package saying it is highly confidential. However, they said that BIFR may convene a meeting of all parties concerned in a couple of weeks time.

BIFR had earlier declined the promoters plan to link joint promotion and sale of real estate assets of the company to retiring debt to the tune of Rs 90 crore to secured creditors.

The board had then asked the promoters to atleast part pay the debts to the tune Rs 40 crore before end July.

As per the proposal promoters sought permission to float a joint venture for developing real estate assets of the company. As per the scheme, promoters, would float a joint venture under the banner of Binny Real Estate and Asset Development Company.

The co-promoter, ETA India Ltd, a 100 per cent subsidiary of ETA Mauritius Ltd, would also float another joint venture.

Both the JVs should be given the mandate to develop the real estate assets under their respective control as laid out in the BIFR revival package.

The fresh proposal was mooted as the efforts to dispose off the real estate assets by the Asset Sale Committee evinced lukewarm response.

According to the original rehabilitation package, the promoters and the co-promoters should have brought in Rs 46 crore each as their contribution to pay secured creditors.

While the co-promoters have already brought in approximately Rs 35 crore and kept it in separate accounts, they have refused to release the funds to the creditors as the promoters have failed to bring in their share for paying the creditors.