The Hindu Business Line : SITRA undertakes tech viability analysis for debt recast of mills

THE South India Textile Research Association (SITRA), the regional textile research body here, has lined up a new analytical work into its system of work studies — preparing technical viability reports for the individual textile mills seeking debt restructuring under the Central Government-sponsored textile reconstruction funding (TRF) programme.

Already seven textile enterprises, including a knitted goods producer and a carpet weaving company, have had their technical viability assessed by SITRA analysts, according to Dr Arindam Basu, Director of SITRA.

Dr Basu told Business Line that his association had taken up three more units for the viability analysis for the debt-recasting programme.

However, the new assignment taken up by SITRA is not considered a money spinner for the research body and Mr Basu maintains that these assignments too would be treated as one more task for which the research body would collect the normal prescribed fee as in the case of preparing any other viability report.

SITRA is one of the textile research associations designated by the Government to undertake the technical viability study of the textile mills seeking a financial revamp under the TRF's package announced by the previous BJP Government in September last as part of the textile industries rehabilitation programme.

Besides SITRA, the other regional textile research bodies such as Bombay Textile Research Association (BTRA), Ahmedabad Textile Industry Research Association (ATIRA) and Northern India Textile Research Association (NITRA) are also the designated agencies to undertake suchviability studiesfor reviving textile units.

According to the SITRA Director, the association's appraisals would be pre-requisite for the textile units' option for the debt recasting. The technical viability report needs to be sent to the financial institutions to facilitate the latter to assess the technology parameters of the units.

These analyses would be limited to the technical analysis covering the areas of technology adopted, wages and salaries of staff, spindle utilisation, productivity and age of the plant and machinery etc.

The financial analysis /financial viability of the mills would be left to the bankers/FIs which would be assessing these aspects independently to determine the scope of allowing the debt recasting.