MUMBAI, December 10: The future of PAL-Peugeot Ltd, the joint venture company of Premier Automobiles and the French auto giant Peugeot, has become uncertain with no takers for the ailing company. With the self-imposed deadline of 30 days to sell the Peugeot stake coming nearer, Premier Automobiles is finding no buyers for the 32 per cent stake which the French giant has offered to disinvest and pull out from India.

Though Premier officials say that they are still looking at all possibilities, the lack of buyers and working capital would finally result in closing down of the company's operations. The company already has accumulated losses of over Rs 300 crore.

"With this kind of slow growth in the auto market, coupled with a grim political scenario, we are finding it difficult to get any buyers for Peugeot's state. If we do not get any buyers, we will not have any other option, but to close down the plant," PAL officials said.

Officials said that they have kept Fiat informed about the conditions about PAL-Peugeot, which owns the Kalyan plant, but the Italian multinational has ruled out any possibility of picking up stake in PAL-Peugeot Ltd. Fiat has already signed a MoU with the government of Maharashtra on Saturday to set up a new car plant though its 100 per cent subsidiary. Besides, Fiat now owns 51 per cent stake in PAL's erstwhile plant in Kurla.

No other multinational or Indian firm has come forward to take up Peugeot stake. With PAL-Peugeot's future uncertain, the first to desert the sinking ship are its dealers. Two dealers based in Delhi and Bangalore have already switched camps to Telco and Maruti.

The uncertainty over the company's fate has already resulted in the company's sales coming down. PAL-Peugeot manufactures the Peugeot 309 model and 118 NE with an capacity of 60,000 cars per annum.

But the worst affected would be the small investors and its 3,000-odd employees. The company scrip is ruling today at Rs 2.70 on the BSE as compared to its issue price of Rs 35 per share.

Unfortunately, Peugeot's decision to pull out of the venture came at a time when even Premier Auto was planning to disinvest in the company and concentrate on its new venture with Fiat. When PAL itself is writing its balance sheet in red ink, it is not possible at all to invest in PAL-Peugeot, PAL officials say.

Barring the massive accumulated liabilities, PAL-Peugeot requires Rs 84 crore as equity participation, coupled with another Rs 10-15 crore as working capital infusion. No auto manufacturer -- both domestic or international -- are showing any signs of joining hands with the Doshis to revive the company.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.