Financial Daily from THE HINDU group of publications
Monday, Dec 08, 2003
Financial Daily from THE HINDU group of publications Monday, Dec 08, 2003 |
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Corporate
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Modernisation Funds infusion into NTC units likely soon G. Gurumurthy
Coimbatore , Dec. 7 THE ailing National Textile Corporation (NTC) is likely to shortly infuse funds for capital expenditure toward modernisation of 15 of the 53 textile units slated for revival under its revamp programme. The modernisation of the first batch of 15 viable textile units is estimated to cost around Rs 300 crore. But initially the Government may spend about Rs 100 crore on these units and this may be undertaken sooner, according to Mr K. Ramachandran Pillai, whole time Director of the NTC's holding company in Delhi. NTC, which is already through with liquidation of assets of the unviable textile mills in all the nine subsidiaries across the country, is also giving a push to asset sales, which, according to Mr Pillai, has gained momentum in the face of the revival in real estate market at least in some States. The sale of assets held by the NTC mills in all the subsidiaries has netted the corporation Rs 402 crore so far. This includes the money realised through sale of land, machinery/buildings from the textile units that were closed down. Mr Pillai, who was here to attend the board meeting of NTC's Tamil Nadu and Pondicherry subsidiary, told Business Line that the voluntary separation of workers undertaken by the corporation in the unviable textile mills would be completed by March 2004. By then NTC would have eased out all the 35,000 workers involving 66 unviable mills under the VRS plan. The corporation has already achieved official closure of 48 units and 30,000 workers employed in these units were eased out on VRS at a total cost (retrenchment compensation) cost of Rs 1,250 crore. Mr Pillai said that in order to complete the VRS for the remaining 5,000 workers employed in the 18 other units slated for closure, the corporation has sought another tranche of Rs 350 crore to be raised through private placement of bonds for which the Union Government would stand guarantee as it did in the previous occasions. NTC would be expected to meet part of the funds needed for the modernisation of the viable units from the proceeds of the real estate sold so far. This is of course besides meeting the Rs 120 crore or so of the interest charges on the funds it had earlier raised through bonds from the financial institutions to pay the VRS commitments.
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