The proposal has been hanging fire for the past ten months, following the state government's refusal to provide a clear commitment regarding writing off the sales tax arrears of Rs 8 crore. However, sources said the state had finally agreed to write off the arrears as this was the only way to get a new promoter for the company.

Earlier, the high-powered committee had, at a meeting in December last year, rejected the VBC Group's request to waive the sales tax. The committee told the new promoters that they would have to pay the sales tax arrears with interest once the company started running in profit. The decision of the committee baffled the VBC officials as other state governments - Andhra Pradesh and Orissa where ALIND hasoperations - agreed to waive the ST arrears if the Kerala Government agreed to provide the same.

The VBC group has made a takeover proposal of Rs 34 crore which includes a one-time settlement of the liabilities of banks and financial institutions to the tune of Rs 22.5 crore. The company also had taken up the responsibility of arrears of pension etc amounting Rs 2.5 crore.

The other major item in the takeover formula was the excise duty arrears of Rs 11.25 crore. Besides, the VBC group will have to pump in at least Rs 12 crore as working capital and Rs 9 crore as margin money requirement.

According to the OTS proposal, the VBC group will pay 25 per cent of the total amount immediately while the rest will be paid in three years as six installments with an interest of 13.5 per cent.

Alind was declared a sick unit by the Board for Industrial and Financial Reconstruction way back in 1987.