ICICI recommends winding up of Secals

By P.V.V Murthi

VELLORE, JULY 30. The Industrial Credit and Investment Corporation of India has recommended to the Bureau of Industrial and Financial Reconstruction to wind up Secals as there were no offers for the takeover of the company. The company, engaged in the manufacture of alloy steel and stainless steel valve castings, was declared sick by the BIFR in March last.

The BIFR has appointed ICICI as the operating agency for working out a rehabilitation proposal for reviving Secals.

According to a BIFR report, the company, established in 1970, had accumulated losses of Rs. 58.83 crores. The secured creditors of the company had stated before the BIFR that they had no objection to declare the company sick. Ms. Jayashree Mahesh, vice- president, ICICI, had submitted that due to huge losses incurred by the company in 1997, the management of the company was transferred to DLJMB, Mauritius, which had since been taken over by CSFB. The company could not turn around because of heavy overheads. Production was suspended in November 2000.

After considering the submissions made by various agencies connected with the company administration including the management, creditors and the employees' representatives, the BIFR declared the company sick and appointed ICICI as the operating agency.

Accordingly, the ICICI issued advertisements in newspapers in March last inviting offers within six weeks for rehabilitation of the company. The rehabilitation proposal included offers for takeover/leasing/merger/one-time settlement of dues to institutions/banks. Though there were ``some enquiries'', no concrete offers were forthcoming for the purchase of the company, and ``therefore we had to recommend to the BIFR to wind up the company,'' Ms. Jayashree Mahesh told The Hindu over the phone on Monday.

Meanwhile, Mr. S. Jayaseelan, general secretary, Secals' Employees Union, said the workers, numbering about 260, had not been paid their wages from November 2000 onwards.

The union has in a letter requested the BIFR not to wind up the company without giving a hearing to the employees' union. In a memorandum to the Tamil Nadu Chief Minister, Ms. Jayalalithaa, the union urged her to make a similar request to the BIFR.

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Section  : Business
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