Textile corp to raise Rs 4,000 cr, sell closed units

National Textile Corporation plans to generate over Rs 4,000 crore by selling its 65 closed units.

The company will seek expressions of interest this month for the 30 mills to be revived through joint ventures as part of a plan drawn up by the Board for Industrial & Financial Reconstruction.

The decision to raise Rs 4,000 crore comes on the back of Rs 3,000 crore already raised by NTC since it embarked on a plan in 2002 to dispose of its assets in the loss-making units.

NTC Chairman and Managing Director K R Pillai said the money was being utilised to pay debts and fund a voluntary retirement scheme. "We have settled outstanding dues of more than Rs 2,000 crore, including Rs 1,600 crore for VRS of the employees of the closed units," he said.

About 47,000 employees have already opted for the scheme and another 15,000 are expected to do so in the next three months.

The current employee strength of the company is 27,000.

As part of its makeover plan, apart from closing down 65 mills and reviving 30 under joint ventures, the company has to modernise 22 units, while the remaining two have been handed over to the Pondichery government.

"According to our Techno Economic Viability Study, we need Rs 550 crore to complete modernisation of 22 units. We will not only procure advanced machines but also go in for external recruitment if the need arises," Pillai said.

NTC has also shut down 134 of its 282 showrooms across the country. "Closure of showrooms is part of our overall downsizing policy. We have even recommended a merger of all our nine subsidiary units into the parent company. The proposal is awaiting BIFR's approval," Pillai said.

Tying loose ends

Rs 3,000 crore have already raised by NTC since it embarked on a plan in 2002 to dispose off its assets in loss-making units

The money will be used to pay off debts and fund a voluntary retirement scheme

The company will also modernise 22 units. Two mills have been given to the Pondichery government