Dynamatic Forging, a city-based company, whose case has been lying with the Board for Industrial and Financial Reconstruction (BIFR), has submitted a revival plan to the Industrial Finance Corporation of India (IFCI).
The company, which had an equity capital of Rs 8 crore, manufactured forging items for the automobile industry.
Dynamatic Forging had entered the market with a public issue in 1987.
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The performance of the company since the commencement of production had been unsatisfactory, which resulted in it being declared a sick unit in March 1994.
In a bid to revive the company, the annual general body meeting was held on September 25, after three year gap, where it passed a resolution enabling the firm to increase its authorised capital to Rs 33 crore.
The company also received the shareholders approval for converting its Rs 3.2 crore debentures into shares. As per the revival scheme, it plans to reduce its original equity size of Rs 8.60 crore by 25 per cent to approximately Rs 6.5 crore. The company later plans to bring in a further Rs 8.60 crore as promoters contribution.
According to officials, it recently restarted operations at its factory in Rajkot. Currently the 1500-tonne close die forging plant is running at 40 per cent capacity but once funds are received from IFCI we plan to run the plant at 100 per cent capacity, the source said.
M V Gokaran, managing director, Dynamatic Forging, said the reason for the poor performance was mainly due to the lack of adequate working capital funds released by the company's bankers, Punjab and Sind Bank.
The bank was expected to grant the company Rs 25 crore They granted us only Rs 20 crore, and a substantial amount was taken back, Gokran said.
The balance which was kept with the company included Rs 3 crore sanctioned as letter of credit and Rs 1 crore given for bill discounting Gokaran said.
Punjab and Sind Bank officials, when contacted, declined to comment on the issues.
The Dynamatic Forging share is presently delisted from the stock exchange for not paying its listing fees.