Mumbai, Sept 27: The Bombay high court has asked Baroda Rayon Corporation to sell its assets and pay off liabilities to creditor the Industrial Credit & Investment Corporation of India (ICICI) on or before January 31, 1999. The move is expected to expedite the sale of the company's viscose-filament yarn (VFY) division. It is believed that a deal with Indian Rayon has been hanging fire for a few months. The court in its order on September 21 rejected ICICI's plea for the appointment of a receiver and removed the injunction on the asset sale. The court, however, said that if the company failed to meet the deadline, a receiver would be appointed.ICICI filed a petition in the high court on June 1, requesting the appointment of a receiver for Baroda Rayon as the company was unwilling to share the the proceeds from sale of assets on a pari passu basis.The court issued an ad-interim order on June 16, restraining the company from asset sale till the pronouncement of the final verdict.
Though the court hasdeferred the appointment of a receiver, ICICI is now in a better position to get back the money as the company will be forced to settle the dues before the deadline ends, said ICICI sources.
Baroda Rayon officials said that ICICI had dragged the company to additional financial burden by resorting to legal recourse. The company will now have to bear additional expenses in the form of interest from June to September, they added.
Apart from the much-speculated sale of the VFY plant to Indian Rayon, the court directive will speed up the sale of the 17th and 18th floors of the company at Hoechst House in Nariman Point to IL&FS.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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