Calcutta, Dec. 17: The lenders of Mangalam Cement will meet this week to take a collective call on how to recover their dues from the Rajasthan-based sick company that owes close to Rs 180 crore to the financial institutions.
The Industrial Development Bank of India (IDBI) has written a letter to the Basant Kumar Birla-promoted company earlier this month, threatening legal action for recovery of dues. IDBI has also threatened to attach and sell the assets of the company as has been made possible by the Securitisation Bill 2002.
The move has upset the management of the company, which now threatens to stop negotiations with the institutions. Senior officials of the B. K. Birla group said the company had offered to repay the principal and had sought waiver of the interest. “IDBI’s letter shows they were not negotiating in good faith. We are likely to stop discussions with them,” they said.
The meeting of the financial institutions later this week is aimed at “resolving the impasse amicably”, said sources in the institutions. The other institutions have still not given up hopes of recovering their dues through negotiation with the company’s management.
Besides IDBI, the other key lenders to Mangalam Cement are ICICI Bank and IFCI. Officials of these institutions say IDBI had not informed them about the letter beforehand.
Alongside, top officials of Mangalam Cement are meeting tomorrow to finalise their response to the letter. The company’s management feels IDBI’s move is aimed at intimidating the Birlas, and stems from the dispute between the A V Birla group and the financial institutions on Larsen & Toubro.
Mangalam Cement suffers a loss of Rs 2.5 crore per month. Its indebtedness to the financial institutions has upset the management’s efforts to sell the company that produces 1.1 million tonnes of cement annually.