Financial Daily from THE HINDU group of publications
Tuesday, Dec 09, 2003
Financial Daily from THE HINDU group of publications Tuesday, Dec 09, 2003 |
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Industry & Economy
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Textiles Corporate - Restructuring NTC revamp may result in region-wise mills groupings G. Gurumurthy
Coimbatore , Dec. 8 IF the Rs 4,000-crore restructuring scheme drafted for the ailing National Textile Corporation (NTC) goes through as per schedule, there is every likelihood that the revamped units would be reorganised under four region-wise mill groupings. There is also the possibility that this may end up in the existing national holding company of the NTC being discarded, according to top NTC officials. The Ministry of Textiles (MoT) has already moved such a proposal for consideration by the Board for Industrial and Financial Reconstruction (BIFR) before which the cases relating to the restructuring of the eight sick NTC subsidiaries, including their winding up, is pending. The proposed grouping will be part of the restructuring programme initiated by the MoT that aims at rehabilitating 53 textile NTC mills found viable and liquidation and sale of 66 other units through disinvestment and modernisation. Speaking to Business Line, Mr Sudhir Bhargava, Joint Secretary in the MoT and acting Chairman-cum-Managing Director of the NTC Holding Company, said that the Ministry has made a representation to the board for amalgamation of all nine NTC subsidiaries into four region-wise corporate entities. The 53 textile units that have been rated as viable after the revamp would be brought under these blocks. "The Government felt that the existing set-up of having individual subsidiaries with different corporate headquarters would be redundant once the restructuring takes shape; hence, the suggestion for merging the viable units with the regional outfits." Currently, all 119 NTC textile units split between the nine subsidiaries are administered remotely by the NTC Holding Company located at New Delhi. Indications are that the administrators of the four region-wise groupings would report directly to the MoT if the holding company is wound up. The process of regrouping depends on how soon the MoT and the NTC are able to realise the sale of high-value NTC real estate in Maharashtra, especially Mumbai, to raise about Rs 2,000 crore. The proceeds will decide the course of much of the revamp programme, but the sale proposal is yet to be authorised and cleared by the Mumbai municipal authorities.
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