HEC, a sick entity, was referred to the Board for Industrial and Financial Reconstruction (BIFR) in February 1992.
After several years before BIFR, Industrial Development Bank of India (IDBI) was appointed as operating agency for the sick PSU.
IDBI thereafter submitted several proposals to BIFR involving the central government, State Bank of India, the former Bihar government (now Jharkhand government) and state electricity board. These entities were required to sanction a package of reliefs and concessions to HEC.
Several meetings were held with these agencies but no agreement emerged. As a result, chances of revival of the ailing company have faded.
BIFR thereafter passed and order directing invitation of bids by the operating agency, IDBI, for the revival of HEC by way of takeover, leasing, amalgamation or merger. BIFR felt this was the best solution.
The response to the invitation of bids was poor. The proposal did not make any progress as a result. despite the direction of BIFR.
Meanwhile, the management of HEC adopted several steps to save the company from closure. The employees despite irregular payment of salary, extended cooperation by reporting for work. The employees also responded positively to the voluntary retirement scheme (VRS) offered by the management.
