Calcutta, Feb 20: The Dunlop India board submitted its revival plan to the Union ministry of finance on Friday, sources in the company said. An official spokesman confirmed the news. However, the company did not submit the plan to the state government.The company's management failed to attend a tripartite meeting, scheduled on Friday, with the unions and the West Bengal government. According to state labour commissioner Suvesh Das, the company's management did not want to face the unions now as it was "not prepared yet."
Earlier this month, the tyre manufacturer closed two of its units - at Sahagunj in West Bengal and Ambattur in Tamil Nadu - owing to a shortage in working capital. On February 16, the company requested the Board for Industrial & Financial Reconstruction to take up its case saying that its networth had been eroded by 50 per cent over the last fiscal.
The plan submitted to the Union finance ministry hinges on the immediate availability of working capital from banks and financialinstitutions. Dunlop's senior management had already met finance minister P Chidambaram around 10 days ago with a plea that the banks be urged to increase the company's working capital credit limit and disburse the money promptly.
Sources in the company said that both the Union finance ministry and labour ministry had reacted "positively" to the request. The ministries had said that the company board should formulate a "reliable, workable plan" which can be implemented.
The revival plan also proposes that the rest of the funding schemes of the company, such as the external commercial borrowings and rights issue, will follow as a natural course once the company is able to reopen its factories.
The immediate fund requirement of the company has been estimated between Rs 50 crore and Rs 70 crore while the working capital need has been fixed at Rs 120 crore. However, the banking consortium of Dunlop has frozen the credit limit extended to the company at Rs 33 crore.
The company's board met in Mumbai onTuesday where managing director P J Rao briefed the members about the happenings in the company, including the meetings with the West Bengal government officials and the bankers.
Following the closure of the factory in Sahaganj, the state government has been continuously in touch with the Dunlop management in regard with the future of its employees.The board also discussed the revival plan and approved it before it was submitted to the Union finance ministry.
Meanwhile, no fresh date has been set for the tripartite meeting with the state government and the unions. According to state labour commissioner Das, the union representatives were present for the meeting on Friday but the management sent a note saying that it wanted to discuss the situation with the state government officials alone. The state government is concerned about the fate of the 4,300 employees of the Sahagunj factory, who are suddenly out of a job. It has been caught on the wrong foot by this action on the part of the Dunlopauthorities just before the Lok Sabha elections, as the opposition parties have been making political capital out of the situation.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
