Indian Rayon Talks With Baroda Rayon Fall Through

Baroda Rayons plan to sell its viscose filament yarn division to Aditya Birla group company Indian Rayon has collapsed, with the latter baulking at the high price sought by Baroda Rayon.

Industry sources said Indian Rayon was willing to pay up to

Rs 50 crore, while Baroda Rayon was demanding Rs 100 crore. Indian Rayon was persuaded by ICICI to consider buying the unit.

Baroda Rayons capacity of around 5,500 tonnes is small, but the unit generates a steady cash flow which could benefit Indian Rayon. The viscose filament yarn industry is a steady, slow-growing industry with a total installed capacity of 55,000 tonnes. Two of the three major players, Indian Rayon and Century Textiles, are controlled by the Birlas. The other major player is the Duncan Goenka-controlled NRC.

Baroda Rayons failure to clinch a deal is a setback to the loss-making companys recovery plans. It plans to sell its rayon and polyester divisions and retain its nylon tyre cord division.

Baroda Rayon had earlier approached Reliance to buy its polyester division, but the latter was interested in only a contract manufacturing arrangement.