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G. Gurumurthy

Aiming for cash loss at `nil' in the current year

Coimbatore April 9 The sick public sector monolith National Textile Corporation (NTC), now on its organisational and financial revamp, hopes to raise its operational income by 20 per cent to Rs 716 crore during 2007-08 as compared to previous year's earnings of Rs 600 crore.

According to Mr Ramachandran Pillai, Chairman and Managing Director of the NTC, the Corporation has managed to bring down its cash losses to as low as Rs 90 crore for the just ended fiscal 2006-07, from a cash loss of Rs 454 crore it incurred during 2002-03 when NTC began its revamp programme.

"During the current year, we expect to halt the cash loss at `nil' position," he said and attributed the improved performance to the structural changes effected on the organisation/financial functionalities.

MoU

The NTC — for which this year, being the terminal year for completing its restructuring exercise, is going to be crucial — has in fact entered into an MoU with the Ministry of Textiles, giving out all physical indicators of its modernization-cum-restructuring proposals and targets including its anticipated turnovers, productivity and workload contributions.

Even as its organisation revamp — including closing down of unviable textile mills spread across the country and pumping in of funds for modernisation of viable units — is on, the Corporation has also prepared and presented to the Government its financial restructuring that has sought to write off Rs 6,000 crore of outstanding interest and loan amount.

Talking to reporters from The Hindu group, Mr Pillai said the proposal for the financial restructuring centering on waiver of interest-cum-equity conversion of loan sent to the Central Government two months ago was under the Finance Ministry's consideration.

Revival process

NTC, as part of its revamp, has already closed down 67 of 119 textile units and is under the process of closing down another 12, leaving only 40 units to revive. Out of this, it has taken up 22 textile mills for modernisation on its own, at an outlay of Rs 530 crore (Rs 80 crore is already spent) and has proposed to try the revival of 18 other units through joint-ventures for which it has called for `expression of interests' from suitable private parties.

"We have set April 28 as the deadline for this and by July we expect the joint venture proposal will take off," said Mr Pillai, who maintained that while the joint venture proposal at 51:49 in NTC's favour would give management control to the private parties, NTC nominees would be present at the board and `asset stripping' would not be allowed to take place under the joint venture mode.

NTC's present spindleage at 13 lakh is spread between the 40 viable units and the Corporation has planned to prune it down to 10 lakh under 22 units slated for modernisation.

More Stories on : Outlook | Textiles | Sick Units

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