The revival package prepared by the state government includes among other concessions, a cash inflow of about Rs 210 crore being arranged from Industrial Development Bank of India (IDBI). A grant of Rs 49 crore has been assured by the government of India besides an interest free loan of Rs 37 crore.
BICL will also on its own mobilise Rs 124 crore through the sale of its assets and land. It is learnt that the government of India has decided to waive off Rs 238 crore interest and convert another loan of Rs 215 crore into equity. All this is likely to take care of companys liability worth Rs 483 core as of now.
The company, which was established way back in 1920, had been declared sick in 1991. The state government has taken the decision to revive the sick company which has been referred to BIFR and has come out with a revival package and also has okayed several concessions.
The Kanpur-based company had been established in 1920 as a public limited company. It continued functioning as a public limited company till the year 1981, when the government of India took over its control and announced its nationalisation. But soon its losses skyrocketed to Rs 450 crore and in view of bad financial condition of the company, it was referred to BIFR which declared it as a sick company in 1992. It was only in 2001 that BIFR approved a revival scheme for the company. It is learnt that BIFR suggested to the state government to convert the lease hold land allotted to the company into free hold land.
It is learnt that the proposed sale of surplus land of BICL is likely to get the company a round Rs 104.78 crore. The BIFR has also asked the government to waive off the Trade Tax due towards the company.
The BIFR has also asked the state government to give the company tax holiday for five years on the woolen clothes manufactured at the plant.
The concessions work out to about Rs 20.80 crore. The cabinet on Monday agreed to allow all these concessions as suggested by BIFR for the companys revival.
The package, first of its kind in Uttar Pradesh, is likely to provide an employment to more than 3,000 people and create indirect employment opportunities for another 9,000 people when one of the largest textile companies of the country BICL starts commercial production once again.