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IDBI to submit revised Binny rehab package to BIFR soon

E-Tex Staff - Chennai

Industrial Development Bank of India (IDBI) will soon submit a fresh plan to the Board for Industrial and Financial Reconstruction (BIFR) for reviving the ailing southern textile giant, Binny. IDBI, the operating agency (OA) appointed by BIFR will submit the new proposal soon and a favourable ruling from BIFR is expected on or before October 23.

The move follows a recent Madras High Court ruling that set aside both BIFR and AAIFR orders spiking the revised rehabilitation plan submitted by the promoters.

The proposal includes the sale of real estate property belonging to the company for a consideration of over Rs 60 crore. Sources in the know said that the Madras HC has directed IDBI to submit the new proposal to BIFR for its green signal.

The proposal includes the sale of nearly 70 acres of real estate property belonging to the company for a consideration of Rs 62.10 crore to the Chennai-based SSI and persons close to pharma major Dr Reddy’s. Sources said that the promoters and co-promoters have already deposited Rs 7.55 crore and Rs 34 crore respectively with IDBI as directed by the high court. Besides, the promoters will also bring in an additional Rs 1.5 crore towards capital to show their bonafides soon, sources added.

IDBI will use the fund brought in by the promoters and co-promoters along with the proceeds from the sale of real estate assets to retire the debt outstanding to secured creditors as well as to settle the claims of workers. Sources said that as per the judgement, BIFR is expected to clear the revised rehabilitation package before October 23. Once BIFR clears the rehabilitation package, the company management would work on a techno-economic feasibility report to revive Binny Engineering.

The report has to be submitted to BIFR for necessary clearance by IDBI within 30 days of getting the clearance for the rehab package from BIFR.

“The high court order has put the rehabilitation efforts right on track and we are confident that the time table set by the honourable court will be adhered to”, sources said. The HC has given a timeframe of 18 months to the promoters to shift the textile unit to a new location and make it up and running. Under the rehabilitation package, Binny will be split into two separate companies - Binny and Binny Karnataka.