Cimmco Birla forced to close unit

By SiliconIndia   |   Tuesday, 24 September 2002, 07:00 Hrs
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The encashment of major bank guarantees followed by cancellation of orders of around Rs 144 crore by Container Corporation of India Ltd (Concor) has affected the financial performance of Cimmco Birla, one of the leading manufacturers of wagons and coaching under-frames.

BANGALORE: The company is contemplating shutting down its wagon manufacturing activities at Bharatpur in Rajasthan, according to a business daily here.

In a communiqué to shareholders, Cimmco Birla said the untoward encashment of bank guarantees by Concor was contrary to the stipulations in the contract, suddenly and without notice.

According to Cimmco Birla, this had led to freezing of banking operations, ill effect on operations and disruption of work at Bharatpur. It also triggered encashment of further bank guarantees and order cancellations by more customers, said the business daily.

"In these circumstances, the management had no option but to declare lock-out at Bharatpur Works," Cimmco Birla informed its shareholders.

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