``Interest on term loans of glycol division for the year amounting to Rs 113.91 crore has not been provided,'' the company said in its financial statement. The company has already registered with the Board for Industrial and Financial Reconstruction (BIFR) as its networth has already been wiped out following accumulated losses in the last several years. It made a loss of Rs 75 crore in the last two years alone. Its equity capital stands at Rs 48.60 crore.

The glycol division which has remained closed throughout last year has been put on the sale block by the company. The company had submitted a rehabilitation proposal with the institutions under which plant excluding land, building and mini boilers will be sold off for a sum of Rs 274 crore, for which payment was tocome only in the 9th, 10th and 11th years on an interest-free basis.

Out of the total proceeds, Rs 218 crore was to be utilised by the company to pay off the institutional liabilities and the remaining Rs 56 crore to settle the borrowings from banks on a pro rata basis. However, a consortium of banks led by State Bank of India (SBI) has rejected the rehabilitation proposal of SM Dyechem as it was "not satisfied" with the unduly long repayment period and a complete waiver of interest charges.

The company had raised funds from the public several times for the implementation of its glycol project. The division ran into rough weather following raw material problems and high operational costs. The company's share which was quoting well below the face value of Rs 10 is rarely traded on the stock exchanges.

Meanwhile SMZS Chemicals, part of the SM Shetty group, has initiated negotiations for selling the assets of its speciality chemicals plant in Pune, Maharashtra. The move comes following the company'sdecision to suspend certain operations of the plant due to mounting losses.

The company has put the value of the assets at Rs 27 crore and the proceeds from the sale will be utilised to repay outstanding liabilities with banks and financial institutions. State Bank of Hyderabad and Sicom are the major lenders to the company, merchant banking sources said. The SM group owes a huge amount to banks and financial institutions. The revival of SM Dyechem will depend on the package being worked out by the BIFR.