Authority orders winding up of Consolidated Fibres

24 April 2007 11:41  [Source: ICIS news]

NEW DELHI (ICIS news)--India’s ailing acrylic fibre maker Consolidated Fibres & Chemicals Limited (CFCL) announced on Tuesday that the Board for Industrial and Financial Reconstruction (BIFR) has ordered the company’s winding up.

 

BIFR is a statutory authority that decides the fate of chronically loss-incurring manufacturing enterprises. The company did not indicate whether it intended to challenge the board’s order before a higher statutory authority.

 

It merely quoted the order: “The bench confirmed its prima-facie opinion that it would be equitable and in [the] public interest if the company was wound up in terms of Section 20(1) of the Sick Industrial Companies (Special Provision) Act, 1985.”

 

The authority declared the company “sick” in January 2006 and had asked financial institution IFCI Limited to explore the prospects of turning the company around by submitting its recommendations.

 

The company has been incurring losses since the 1990s and its 12,000 tonne/year acrylic fibre plant at Haldia in West Bengal has remained closed since 30 May 2006 due to depressed market conditions. 

 

In 2005, Consolidated Fibres submitted a financial and operational restructuring package to lenders, which mooted the installation of a co-generation plant for producing process steam and electricity.

 

 

 


By: Naresh Minocha
+65 6780 4359



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