Revival of sick units


Industry play key role in the development of a country. Steps should be taken for the revival of sick units by giving them working capital so that they could increase the exports. The revival of such units would open jobs for unemployed youth as well. The existing industrial units should be exempted taxes, new industrial zones, estates and clusters should be established away from the densely populated residential areas, especially alongside motorway or major roads to accommodate for relocation of industry from residential areas. The cost of land in these industrial zones should be less than the cost of land in the urban areas and should have better environmental conditions.
The Securities and Exchange Commission of Pakistan with the approval of the Federal government has notified the Corporate Restructuring Companies Rules, 2019 which will help revival of sick units. The enactment of Rules provided institutional arrangements and legal processes for the revival and rehabilitation of potentially viable companies. The new law as introduced is perceived as a revolutionary step in acquisition, management, restructuring and resolution of non-performing assets of financial institutions besides restructuring reorganization, revival and liquidation of financially distressed companies and their businesses.
Generally, corporate restructuring happens when a corporate entity is experiencing significant problems and is in financial jeopardy. The corporate restructuring companies shall be responsible to acquire and to manage and restructure or dispose of distressed companies, their businesses and properties. The restructuring companies shall also support and raise finances for rehabilitation, restructuring, reorganization or liquidation of distressed companies businesses and their properties.
The new law will enable the financial institutions to transfer its non-performing assets to a corporate restructuring company along with all titles, rights, privileges and remedies available and attached to such assets for its proper management. It is seen by many as instrumental in turnaround of the sick industry in Pakistan. The revival of the sick units will help to boost economic activity in the country be enhancing job opportunities and exports.

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