The group's outstandings are estimated to be over Rs 650 crore. Modern had earlier received an in-principle approval from the institutions on the proposed package.

The package envisages waiver of the group's compound interest and liquidated damages on existing long-, short-term loans as also non-convertible debentures from banks and institutions. Of the total waiver, Modern Syntex was granted a relief of Rs 18.14 crore, Modern Threads Rs 6.02 crore, Modern Insulators Rs 1.05 crore, Modern Terry Towels Rs 8.04 crore and Modern Denim Rs 6.64 crore.

Institutional sources told The Financial Express that the group is under close scrutiny with regard to efficient running of the companies. They felt that despite setting up state-of-the-art units, loose management has led to its dismalperformance.

Significantly, institutions have also set a deadline of December 31 this year for the promoters to bring in Rs 50 crore interest-free unsecured fund towards working-capital resources from the sale proceeds of Modern Denim or any other group company.

In case, the group fails to divest assets to bring in the fund within the proposed date, institutions will have the automatic right to divest any of the companies without making any further reference to the promoters.

It will be mandatory for the promoters to give specific consent on such a transfer deed along with the approval of the respective company's board.According to Modern group spokesperson, the group has appointed Jardine Fleming and ANZ Investment Banking to negotiate with international buyers. "Around three-and-a-half months are left for the deadline within which we are confident of finding a buyer," he added.

He further said that the group is expecting to mop up Rs 350-400 crore from the sale proceeds of Modern Denim. According tohim, Modern will not go for a price lower than that since over Rs 300 crore has been invested in the company for installing updated technology and fresh capacity. He, however, said that the international market for denim was currently depressed.

In 1997-98, Modern Denim had incurred a loss of Rs 38 crore. According to company projections, Modern Denim will post Rs 11.92-crore loss in 1998-99. On whether the group was interested in selling any other group companies, the spokesperson said that the promoters were open to the idea provided such a deal fetched a proper price.

He, however, denied any move on part of the Rankas to sell Modern Syntex so far. Significantly, the Alwar blended-yarn unit of Modern Syntex is under lockout for over a year now. He said the company is reluctant to resume production in the unit till the management receives commitment from the labour force for at least five years.

During the last fiscal, Modern Syntex suffered a Rs 86.33-crore loss and expects to record a loss of Rs 28crore during 1998-99.