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Sabarinath M
Mumbai, Feb 2: Banks and financial institutions are evaluating an elaborate restructuring plan of Mafatlal Industries, which involves deployment of funds generated from sale of the company's stake in Nocil. While ICICI is the lead institution, State Bank heads the consortium of bankers.
"Institutions and banks have been looking into the proposal over the last three weeks. In fact, they have sought certain clarifications to which the company has responded," said a senior Mafatlal Industries' official.
Early approval of the plan bodes well for the company as it also mentions strategies to cut down spiralling power costs in Gujarat, where most of its plants are located. Since the Gujarat government recently allowed free-wheeling of power, the company would take advantage of it by having a centralised power plant for all units, the sources said.
Incidentally, the astronomical cost of power is believed to have forced the company to hold back salaries over the last few months. This has instigated workers tostart agitation at the corporate headquarters in downtown Mumbai forcing the company to temporarily relocate to its former office at Nariman Point last month.
The company is yet to transfer officials to its corporate office in the Mumbai suburb though the agitation has more or less subsided. However, officials maintain that it could happen within a month or so. The shifting is inevitable as Mafatlal Industries is eyeing a large amount from the sale of its eighth floor office at Mafatlal Centre where the staff is temporarily placed.
Officials say that the real-estate price crash has forced them to put the floor sale plan on the backburner. Incidentally, it had sold another office floor at Mafatlal Centre to Japanese Major Mitsui last year and leased out a part of its office premises at Mafatlal House to property consultants Cushman & Wakefield.
The cash crunch will continue for some more time with the money from Nocil's stake sale still to come. In fact, Nocil is awaiting necessary approvals and is alsogearing up for a reduction in work force before it actually formalises the restructuring.
Mafatlal Industries has, of late, been considerably reducing its exposure in the domestic market keeping in view the notion that export-led growth is the key to its long-term success. Products which do not have any export potential are being dispensed with, sources said.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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