The Kolkata-based Hindustan Seals (HSL) has evinced interest to associate with Danmetal of Germany in taking over the assets of ailing Pennar Aluminium Company (Palco).
Danmetal's proposal to revive Palco is under the consideration of the Board for Industrial and Financial Reconstruction (BIFR). Palco was referred to the BIFR in April 1998. Danmetal, in its proposal submitted on August 8, 2001, has offered to pay Rs 110 crore as a one-time settlement towards all the dues of Palco.
According to sources, B K Agrawal, the chairman of HSL, held discussions with the financial institutions and expressed his willingness to associate with Danmetal. At present, Palco is producing about 600 tonne of aluminium rolled products per month on a job-work basis for HSL.
Palco's plant located near Nagpur has an installed capacity of 20,000 tonne rolled products per annum. Sources said that HSL, if associated with Danmetal, can take care of domestic market of Palco, while some of the production is already being exported through Danmetal.
HSL, with a net worth of Rs 100 crore, produces aluminium caps, containers, printed sheets, closures, apart from mosquito coils and steel crowns. The company made a net profit of Rs 14.5 crore on a turnover of Rs 245 crore during the last fiscal.
However, the institutions, at their consortium meeting held on August 8, 2001 asked Danmetal to improve their offer. Danmetal had proposed to make the above payment to institutions within 180 days from the date of acceptance of their offer by BIFR, whereas the institutions expect a settlement as soon as BIFR gives the ruling.
Sources said the institutions have expressed some reservations since the proposal given by Danmetal does not cover any type of settlement with the present shareholders of Palco.
