Pallonji firm defaults

SIV, established in 1957, is engaged in the manufacture of viscose stable fibre and viscose filament yarn. Since 1983, the company has been managed by the Shapoorji Pallonji group. SIV8217;s financial performance has been severely affected due to the prolonged closure of the wood pulp plant on account of environmental issues.

8220;High costs of imported wood pulp coupled with a sluggish market for fibres have led to a continuous deterioration in the financial performance of the company with cash losses during the last three financial years. The company has reported a net loss of Rs 106.5 crore during the year ended 1999 and as on March 1999, over 70 per cent of its peak net worth had been eroded due to accumulated losses,8221; CARE said.

It said SIV has restarted the wood pulp plant in June 1999 following permission granted by the Tamil Nadu Pollution Control Board. The company has also prepared a detailed financial restructuring plan which envisages reschedulement of loans from FIs/banks interest rate reduction.