BHEL's Trichy Ancillary Units seek rehabilitation package from lenders

Engineering ancillary units around the Bharat Heavy ElectricalsBSE -2.31 % factory in Trichy -beset by mounting losses and debt -are seeking a rehabilitation package from lenders that will allow them to bid for their share of orders from the public sector unit that is seeing a steady rise in business in recent months. 

In a memorandum to the finance ministry, seen by ET, the small units have requested a cluster rehabilitation programme. 

It entails moratorium on principal on term loans for 18 months, additional working capital for executing orders, and stalling loan recovery action by the banks. 

"What we need is a helping hand from the banks. Just as the situation brightens up, we are hoping we will not be curtailed by their actions," said Ashok Sundaresan S, president of BHELBSE -2.31 % Small and Medium Enterprises Association, Trichy . Nearly all of the 500 units clustered around the Trichy plant are small-scale units, taking orders of welding, maching , fabrication and other engineering work for over four decades. Several units have been declared sick and about a hundred are in danger of being declared as "non-performing". 

However, the improved order book posi tion for BHEL announced by its managing director Atul Sobti at the company's annual general meeting last week has buoyed the spirits of the beleaguered ancillaries who expect a turnaround in their fortunes as well. Sobti said BHEL ended fiscal 2016-17 with an enhanced order book of Rs 1.05 lakh crore for execution in the current fiscal and beyond. 

Source:http://economictimes.indiatimes.com/industry/indl-goods/svs/engineering/bhels-trichy-ancillary-units-seek-rehabilitation-package-from-lenders/articleshow/60852094.cms