After considering the proposals in this DRS by IDBI, which was appointed as the operating agency (OA) for reviving this Ranbaxy group company, the BIFR board has asked it to circulate the scheme among all concerned parties.

"It has been decided to circulate the DRS by the board, based on the one received from the operating agency (OA) for obtaining consent of the parties concerned, under Sick Industrial Companies Act (Sica)," a recent BIFR order says.

"It is directed that short particulars of the scheme be published in two local dailies inviting objections or suggestions to it," it says. The board will hear any objections or suggestions received consequent to the advertisement on 17th June next, the order adds.Promoted by the pharmaceutical majorRanbaxy Laboratories and Punjab Agro Industries Corporation (Paic), Montari Industries Ltd was incorporated in January 1983 to manufacture 1600tpa technicals of isoproturon (IPU) and chlorpyriphos (CPP) at Toansa, Punjab and pesticide formulations in Chandigarh.

The project was set up in 1987-88 at a cost of Rs 7.8 crore initially to manufacture isoproturon (IPU) and butachlor. It was part-financed by term loans from banks, totalling to Rs 92 lakh besides a public issue of convertible debentures aggregating to Rs 5.2 crore.

Subsequently in January 1992, the company raised another Rs 35.98 crore through public-cum-rights issue of secured, partly convertible debentures, to set up a manufacturing facility for CPP technical at Toansa at an estimated cost of Rs 13.63 crore besides investing in extensive modernisation and relocation activities. Included in these plans was relocation of the formulation unit from Chandigarh to Alwar, Rajasthan.

"But this relocation could not happen as the Rajasthan StatePollution Control Board did not give its approval," the BIFR order says.

Besides, facilities to manufacture butachlor were diverted to make IPU. Also, after the CPP technical plant went on stream, the "company faced immense problems at the time of commercialisation and it took two years to stabilise technology". Also, Montari Industries' second rights issue planned for May 1993 was deferred due to depressed capital markets; it was finally made in January 1995.Montari Industries was declared sick by BIFR on July 22, 1996, when its accumulated losses were Rs 44.45 crore against share capital and reserves of Rs 39.83 crore. In an order in March 1997, the board attributed Montari Industries' sickness to delay in technology absorption in CPP technical plant, high cost of short-term borrowings and inadequate working capital.