Financial Daily from THE HINDU group of publications
Saturday, May 11, 2002
NTC panel okays sale of sick mill assets in TN
COIMBATORE, May 10
THE asset sale committee (ASC) formed by the National Textile Corporation (NTC) to effect sale of assets held by its sick textile undertakings in Tamil Nadu has approved the disposal of assets (other than the land) from two closed NTC units in the State.
But the Tamil Nadu subsidiary is awaiting clearance from NTC's holding company for sale of surplus lands available with 10 NTC mills in the State which includes the entire land of four units set for closure.
The sale of the estimated 79 acres of land lying with these units is crucial for the revival of the remaining six textile units in the State identified as viable, according to informed sources.
The ASC, in its first meeting held last month-end, gave its approval for the disposal of moveable assets, including the surplus and obsolete textile machinery held by Krishnaveni and Om Parashakthi mills, which are defunct and closed now.
The tender-cum-auction mode for the machinery sale has been put through and the bids received from the buyers were approved by the ASC, the sources told Business Line.
The TN subsidiary has estimated that the sale of assets (other than the land) would fetch it around Rs 41 crore. Out of this, the machinery being sold right now from the two closed units in the city alone would bring around Rs 17 crore.
The NTC unit in Tamil Nadu is said to have already removed certain machinery which were found to be re-useable by its other working units and only the surplus machinery is being sold. The process of sale of machinery was continuing, the sources said.
However, for the Tamil Nadu NTC unit which has drafted a Rs 138-crore revival plan for the 6 viable textile units to be left under its care in the State, the process of land sale would be the key, as it has estimated to realise Rs 80 crore from the sale of 79 acres.
Two important agenda items - settling the outstanding/pressing liabilities estimated at around Rs 45 crore and financial commitment to the tune of Rs 35 crore needed to continue the ongoing voluntary separation of workers - could go unhindered if only the sale of assets, especially the land, were carried out in time.
The revamp plan includes Rs 28 crore for working capital needs and Rs 31 crore for unit modernisation. Any slip in the land sale schedule, it is said, would financially hurt the revival plan and may lead to some more units, now classified as viable, being added to the list of "unviables''.
The NTC holding company has proposed to engage ICICI Home Loans as a consultant to advise it on surplus land sale deal; but it is learnt that the subsidiary is still awaiting communication in this regard.
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