Grasim Industries has submitted a rehabilitation proposal to the Board for Industrial & Financial Reconstruction (BIFR) for its ailing subsidiary Shree Digvijay Cements. The strategy designed seeks concessions such as sales tax exemptions and royalty concessions.
Confirming the move, the company spokesperson said, "We have submitted the revival proposal to BIFR but at this juncture we are not in a position to disclose further details."
According to sources close to Grasim, it has also approached institutions for a debt restructuring. The company has asked for royalty concessions as the limestone quarries are located far away from the cement plant, which increases the company's freight cost thereby pushing up its cost of production.
Analysts said the company would look forward to sales tax exemptions which is readily available to new plants. Digvijay Cement's dry process plant is around 14-year-old whereas its wet-process plant was set up in 1944.
Manpower optimisation is another area of focus. The company is also concentrating on energy conservation, fuel efficiency measures. The package has been submitted with ICICI, the operating agency.
The 1.25 million tonne Digvijay Cement, acquired around three years back from the Bangurs, was reported potentially sick last year.
Shree Digvijay had incurred a net loss of Rs 63.92 crore for the 18th month fiscal ended September 30, 1999.
