Mr Varma was talking to the press after the 81st annual general meeting of the paint company held Tuesday in Kolkata.
The company, which now stands referred to the Board for Industrial & Financial Reconstruction (BIFR), has run up a total cumulative loss of Rs 200 crore so far. Its revenue for 2003-04 was Rs 19 crore as against Rs 68 crore in 2002-03.
The companys total dues to financial institutions, banks and debenture-holders for the period 2000-04 is Rs 246 crore.
In his speech, Mr Varma said that the company was under a severe liquidity crunch and had not been able to meet the commitments regarding payment of dues to banks and financial institutions.
In spite of our efforts, no fresh funds could be injected and as such our efforts to continue production and to sustain the market supplies did not materialise, said Mr Varma.
The company wants to dispose of its Panvel factory in Mumbai which is located on a 5-acre piece of land.
But this the financial institutions have to decide. The money will repay substantial dues and will help us to restructure the company, said Mr Varma.
The chairman also told the shareholders of the company that the lead financial institutions that constitute ARCIL are at present doing the valuation of the assets.
Said Mr Varma, ...it is expected that this will be through within the next six months or so. Once this is done, performance of the company will be improved to a large extent and the market lost is expected to be regained once again.
The company had already suspended its operation at Naihati Factory in West Bengal and the Sikandrabad factorys operation is carried out on a very small scale, according to Mr Varma.
Company president Anant Sinha hopes that ARCILs valuation process will soon be over and will assess the amount of fresh capital needed for the purpose of starting production at the two factories.