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Arijit De
Mumbai, Dec 16: Financial institutions are finally set to give a green signal to Philips India for selling off two units -- the colour television (CTV) unit in Calcutta and the passive components unit in Loni, near Pune.
Company officials claimed Philips has received a "verbal go-ahead" following managing director K Ramachandran's extensive discussions with the institutions last week. A formal letter from the institutions, which jointly hold 20.93 per cent in the company, is expected by the weekend.
The decision by the institutions has caught the Philips union by surprise. The union is currently embroiled in a bitter battle with the management to stall the sale of the two units, in particular the CTV unit in Calcutta, on the grounds that the sale is "detrimental to workers' interest".
The Philips union, which is miffed at the company's decision to sell the CTV unit for a mere Rs 9 crore, has refuted the company's claim that a voluntary retirement scheme offered at the CTV unit would have cost thecompany over Rs 21 crore.
Senior union members told The Financial Express: "There is no way that a VRS at the CTV unit can set Philips back by more than Rs 9.2 crore."
Senior union members explained that Philips India officials, by their own admission, have said that around 200 of the 359 workers at the CTV unit are less than 40 years of age and a similar number has less than 10 years work experience.
By no stretch of imagination can a VRS at the unit cost the company more than Rs 9.2 crore which is substantially less than their claim of over Rs 21 crore. "We have also informed the financial institutions about this," the members said.
The union, on their part, has shot off three letters to the institutions so far. The letters stated the union's specific objections to the Philips-Videocon deal -- the CTV unit is to be sold to a Videocon group company for Rs 9 crore.
The unions have vehemently opposed Philips' move to divest the CTV unit for a mere Rs 9 crore against a valuation of Rs 28 croreby Dalal Consultants, who had been appointed by the company, and a book value of between Rs 16 crore and Rs 17 crore.
The Philips management claims that the Rs 9 crore to be paid by Videocon, for which an agreement of sale has already been inked, is justified if the liabilities that Videocon will absorb are taken into account.
Philips has said that Videocon will abosrb all the 359 workers under the same service agreement and will also absorb the gratuity and leave encashment liabilities.
Copyright © 1998 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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