LHC opens way for reviving hundreds of sick industrial units

FAISALABAD: A Lahore High Court (LHC) decision has opened the way for revival of hundreds of sick industrial units in the country and increase in exports manifold.

The LHC historic verdict, given on Oct 29, allowing a Faisalabad-based industrial unit, Chenab Limited, to get its bank loans rescheduled, would benefit hundreds of other such units.

According to an estimate, the LHC verdict would help revive at least 40 sick units only in Faisalabad, which would enhance exports by $1.5 billion annually. Economists believe the revival of only three big industrial units would create at least 82,000 jobs in the country.

The verdict also decided a rule that if 75 per cent of the financial institutions would permit rescheduling of their loans for the sick units, remaining 25pc would be bound to follow suit. The court also accepted the Chenab Limited claim that during the past 35 years, it never got rescheduled any of its bank loans and it was never declared a bank defaulter.

Chenab Limited Chief Executive Mian Muhammad Latif said his industrial units had to face severe financial crisis due to gas and electricity shortage in the country and various other factors about 15 years ago. At that time he had requested the financial institutions to reschedule his industry’s loans, but the process could not be completed due to lack of relevant laws and moving of courts by some banks.

He welcomed the court decision, saying new industrial units take some three to four units to become fully operative but the sick units could be revived with less money and in a short period of time.