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Old 7th June 2017, 16:00   #1
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Default Railway wagon manufacturer 'Burn Standard' files for bankruptcy

Burn Standard Company Limited (BSCL), commonly called as Burn Standard is one of the wagon manufacturers for Indian railways operating out of West Bengal. They have now filed for Bankruptcy as their debt is too high with the government doing nothing to recover it or any of the banks coming forward to help with a loan.

They were into manufacturing of tankers, hobbers and flats - all of these are used for non passenger uses in the railways. Apart from these, they were also into manufacturing of various other railway components like Casnub bogies, Couplers, Draft Gears etc.

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"For about 23 years, we were trying to bring back the company's lost glory. But even after all our efforts the company couldn't clear long pending debt. Company's debt rose from Rs 82 cr to Rs 284.26 cr in past few years," Burn Standard's chairman Mahammad Adab Alam said..........................

....He also said that no bank was willing to give loan to the company thus making it hard for them to buy raw materials and give payment to its employees.

......................."In 2010, The then Railway minister Mamata Banerjee took some steps to revive the company but after her resignation nothing was done on ground. The rail administration couldn't even manage time to think about the proposal to earn capital worth Rs 300 cr by selling surplus land and assets of Burn Standard," he said.
http://timesofindia.indiatimes.com/b...w/59035110.cms
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Old 8th June 2017, 10:33   #2
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

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with the government doing nothing to recover it or any of the banks coming forward to help with a loan.
Why should they? It's an open market out there. If a company cannot survive on its own after decades of trying, better it shuts down OR someone else buys + manages it OR assets are sold.

From what I read so far, any further loans to this company will just be throwing good money after bad.
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Old 8th June 2017, 11:26   #3
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

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We had proposed for selling the surplus land of Burn Standard but haven't received any reply from rail ministry so far,
The particular report has multiple references to this point. Why do Govt want to sell industry specific land to revive a sick unit?
As recently, a lot of closed down factory lands ends up in huge profitable housing projects as the controversies are not new.
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Old 8th June 2017, 11:35   #4
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

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Originally Posted by GTO View Post
From what I read so far, any further loans to this company will just be throwing good money after bad.
True but if they are doing something similar for Air India, then the expectation here as well isn't wrong.

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Originally Posted by PetrolRider View Post
The particular report has multiple references to this point. Why do Govt want to sell industry specific land to revive a sick unit?
The only reason I see to do so is secure jobs of the workers there. Don't see any other reason
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Old 8th June 2017, 11:55   #5
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

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The only reason I see to do so is secure jobs of the workers there. Don't see any other reason
The report never mentioned that they want to pay off employees with the sale of land, it mostly talked about debt and revival plan. IMO, if a plan didn't live up for 23 years, it never will. I am extremely sorry, if I misunderstood the report.

Anyway, isn't bankruptcy means a more competent professionals look after the best way to get all stakeholders compensated evenly?
Industry lands are mostly owned up by govt and leased out to industry in very cheap rate to promote industrialization. If some industry for whatever reason gets sick, they best way is to step aside let new industries take up. It is not their business to sell out cheap leased land to land developers.

Last edited by PetrolRider : 8th June 2017 at 11:57.
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Old 8th June 2017, 12:29   #6
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

Just checked: this company is a Govt. of India undertaking; so naturally, the Govt. will end up footing the bill for this mess in one way or another.

Add to it, this is in a state where it wouldn't take long for there to be a state-wide bandh.

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True but if they are doing something similar for Air India, then the expectation here as well isn't wrong.
One mistake doesn't mean you make another! The writing is on the wall for Air India to be privatized. But given how deep a hole the company has dug itself into, facilitated by the Govt., it might not be as straightforward.

Last edited by libranof1987 : 8th June 2017 at 12:30.
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Old 8th June 2017, 13:18   #7
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

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True but if they are doing something similar for Air India, then the expectation here as well isn't wrong.
Without delving into the pros & cons, most governments around the world prefer to maintain a direct presence in key sectors - these include airlines, the postal service etc. Burn Standard has no such national significance. Whatever it offers is easy to source from someone else as it is after all a manufacturer, not a provider of key services.
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Old 8th June 2017, 16:17   #8
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Default Re: Railway wagon manufacturer 'Burn Standard' files for bankruptcy

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Originally Posted by centaur View Post
Burn Standard Company Limited (BSCL), commonly called as Burn Standard is one of the wagon manufacturers for Indian railways operating out of West Bengal. They have now filed for Bankruptcy as their debt is too high with the government doing nothing to recover it or any of the banks coming forward to help with a loan.

They were into manufacturing of tankers, hobbers and flats - all of these are used for non passenger uses in the railways. Apart from these, they were also into manufacturing of various other railway components like Casnub bogies, Couplers, Draft Gears etc.
Welcome to the capitalist world where companies will be born and will die. We do not want to create monsters like Air India, BSNL/MTNL and the like.

Last edited by GTO : 10th June 2017 at 09:37. Reason: Typo
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