Denmark has piped rivals like AV Birla group company Hindalco and Anil Agarwal & Associates, the promoters of Sterlite Industries in the race as the front-runner for acquiring the assets of the sick Pennar Aluminium Company. The Danish company has come out with two proposals: A one time payment of 1.10 billion rupees as full and final settlement of dues to banks, financial institutions (Fls), debenture holders, non-banking finance companies (NBFCs) and the National Aluminium Company. The amount has to be paid within six months after being approved by BIFR. Secondly, it proposes to pay 100 per cent of principal dues on a deferred payment basis. Initially, 10 per cent of the total amount will be paid. The balance 90 per cent will be paid under five annual installments to Fls, debenture holders and NBFCs. In the case of banks and Nalco, the balance outstandings will be converted into zero coupon debentures which will be redeemed in the sixth, seventh and eighth years. Pennar began operations in December 1993 and was in good financial health till March 31, 1996. However, customs duties continuously fell sharply from a peak of 105 per cent to the present levels of 27.5 per cent. This opened the floodgates to imports and the consequent competition saw Pennar slipping into the red and then became a BIFR case.
NSTL
