``The company has chalked out several measures to cut employee costs and administrative overheads, and the voluntary-retirement scheme is delayed due to a severe cash-crunch. The company is not pursuing it for the time being. But once the banks agree to provide funds, the scheme will take off,'' sources said.

The plan to reduce the number of employees is part of a wider restructuring exercise which involves a package of measures to reschedule loans and interest.

The company had submitted a loan-rescheduling package to lead financial institution IFCI, which is yet to be approved. It is believed that the financial institution has suggested certain changes to be made in the proposals. Indian Organic sources, however, claimed that the Industrial Finance Corporation of India (IFCI)had cleared the restructuring plan and that the institution was waiting for the appointment of the new chairman.The company is seeking shareholders approval for the issue of 30.27 lakh equity shares of Rs 10 each to Bloomingdale Investment Finance. The price of the issue will be determined in accordance with the Securities and Exchange Board of India (Sebi )regulations.

The company plans to rope in buyers for its partially-oriented yarn plan and surplus lands to tide over the financial crisis.

In fact, the severe liquidity crunch and an erosion in margins had resulted in higher interest burden on the company.

The imposition of additional customs duty on imports and the depreciation of rupee will increase the price of main raw material, namely PTA, leading to worsening of the present situation.

The company is increasingly resorting to the use of recycled raw materials to reduce the additional cost arising from the increase in duty.

For the six months ended March 31, 1998, the company has posted anet loss of Rs 4.93 crore. The lower price level in the polyester industry has been cited as the reason for the dismal performance.