Employees of one of India’s oldest glass making company, the Hindustan National Glass and Industries (HNG), have written to the Committee of Creditors (COC) led by consortium of banks, about how an ageing glass melting furnace plant could impact the safety of thousands of workers due to delay in the corporate insolvency resolution process (CIRP).

Share Market Live

NSE

A ‘furnace’ is a giant heater that melts raw material for making glass. Each day, 600,000 food grade bottles are produced by HNG in Puducherry since the company is a leading supplier of containers to the beverage, food and pharma industry.

The letter states that since COC had approved a bidder, lacking an approval from the competition commission of India (CCI), it fears delay of the insolvency resolution. Usually, a CCI approval is required before a resolution plan is finalised.

Puducherry furnace plant, says the letter, was rebuilt in 2004 to typically run for 10-12 years. Hence, only when HNG’s CIRP is concluded soon and a new owner comes in with funds to infuse, can the furnace be rebuilt to keep the company’s operations financially viable. Employees have told COC that dis-functioning or shutdown of HNG’s Puducherry plant could hit the financial feasibility of the insolvency process as the company’s asset base will be affected. Employees say their last wage settlement due in 2014 is also pending after it was done more than a decade ago in 2010.

“The current condition of the furnace is very poor and it is at an imminent risk of failure. The furnace was designed in 2004 to last for 10-12 years max. Its life has been more than spent. To ensure a long term sustenance of the company’s operations and market share, it is important that the entire CIRP process be completed at the earliest and new management considers rebuilding the furnace on priority,” the letter from employees to COC said.

HNG’s current Puducherry unit was built and commissioned in 1992 by Ballarpur Industries with technology from Owens Illinois, USA. It was later acquired by HNG in 2002 from Owens Brockway (India). As per the letter, the last full rebuild of the furnace was done in 2004 and “subsequently patchy, short term repairs have been carried out in 2007 & 2014 followed by running repair activities in 2017,” the letter says.

HNG’s insolvency resolution started in January this year but has run into a controversy after COC selected a bidder lacking CCI approval. No deadline had been set by COC for the bidder to get approval, which could even take months.

First Published:Dec 3, 2022 3:22 PM IST