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PAL hopeful of reviving PAL-Peugeot this year

Premier Automobiles Limited, or PAL, is hopeful of chalking out a revival plan for its now defunct joint venture -- PAL-Peugeot Limited, or PPL, -- by the end of this year.

PAL is currently in discussions with ICICI Limited on the possibility of rehabilitation of PPL. "I am hopeful that something positive should emerge this year,'' Vinod L Doshi, chairman of Premier Automobiles, said.

PAL-Peugeot was promoted as an equal joint venture between Premier Automobiles and Automobiles Peugeot of France. However, due to differences between the two partners, Peugeot decided to quit the venture and pulled out of India, transferring its 32 per cent stake in PAL-Peugeot to PAL. PAL thus has 64 per cent stake in the venture, which has not been operational for the last three years.

The Bombay High Court had recently appointed a liquidator for PAL-Peugeot, and agreed for liquidation of the company if revival was not feasible. ICICI, which has been appointed by the court to explore the revival chances, is yet to finalise its stand.

PAL was also initially trying to sell-off the Kalyan unit and had initiated talks with Czech carmaker Skoda Auto, Fiat Auto Spa of Italy and even Mahindra and Mahindra for the deal. But all the companies had decided against purchasing the plant.

The Doshis had approached the three companies in the wake of a letter by ICICI asking them to resolve the crisis in the partnership between PAL and Peugeot.

''With the unexpected and unilateral withdrawal of Automobiles Peugeot of France from the joint venture, PPL had run into rough weather and had to face financial hardships. Due to a complete standstill of operations and paucity of finance, PPL was not able to service the debenture holders by paying interest on the due dates. Only minimal operations necessary for maintenance of its plant are being carried on by PPL," Doshi said.

Meanwhile, in a bid to cut costs, Premier Automobiles is planning to get its shares delisted from the National Stock Exchange, or NSE, and Pune Stock Exchange Limited, or PSE, besides trimming the number of directors on the board from 12 to eight. Its shares would, however, continue to be traded at the Bombay Stock Exchange, or BSE.

Though the company would be seeking its shareholders' nod tomorrow for going ahead with the delisting, it is yet to finalise a time-frame for carrying out the same. PAL would be shortly approaching the Securities and Exchange Board of India, or SEBI, for final approval.

''Presently, the company's shares are listed at BSE, NSE and PSE. However, a bulk of trading takes place only at the BSE and there is virtually no trading of the company's shares at PSE. As part of cost reduction measures, the company is planning to delist voluntarily its equity shares from PSE and NSE,'' company sources said.

The proposed delisting, the sources said, would not adversely affect the investors since the shares will continue to be listed in BSE.

Regarding the move to trim the number of directors, the sources said the company had in 1995 reduced the number from 15 to 12. ''In view of the current level of operations of the company, the board has decided to trim it further to eight.''

UNI

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