The Hindu Business Line : NTC push to revive 12 more mills

The partner will run the mill for 33 years on lease after which we have a provision to renegotiate and extend the contract _ Mr Ramachandran Pillai, NTC chief

Mr Ramachandran Pillai, NTC chief

G. Srinivasan

New Delhi, Jan. 7 Buoyed by five of its mills being successfully bid by private players through joint venture route for modernisation, the National Textile Corporation (NTC) is keen to re-bid another dozen NTC mills through this mode and the process would be set off within a week.

The Chairman-cum-Managing Director, Mr. K. Ramachandran Pillai, told Business Line that in March 2007 the holding company went in for modernisation of its 16 mills through the joint venture route and by the end of 2007, the corporation was able to sign joint ventures for five of its mills — two with Pantaloon, two with Alok Industries and one with Bhaskar Industries Ltd. The balance 11 plus Sharada Mills (where all the employees have taken voluntary retirement) would be put up for modernisation through the joint venture route.

The past practice of retaining 51 per cent equity by the corporation and the balance 49 per cent going to the prospective private partner would continue in the new cases. Management control would be vested with the partner who would make all the investments and run the mills for 33 years on lease after which “we have a provision to renegotiate and extend the contract,” Mr Pillai said. The land is given on right-to-use basis, preferably for textile-related activities. Of the 12 mills to be modernised, six are in Maharashtra, two in West Bengal, one each in Andhra Pradesh, Kerala, Uttar Pradesh and Orissa.

With the five joint venture partners NTC had signed the memorandum of understanding, transfer of undertaking and shareholders’ agreement. “We have successfully arrived at a settlement with the trade unions of these five mills — four in Mumbai city and one in Aurangabad on VRS payments for existing employees, entailing Rs 150 crore”.

He said the corporation was able to secure the land sale of its Ghaziabad Swadeshi Polytex Ltd, in which NTC has 34 per cent equity and the balance being held by Paharpur Cooling Tower Ltd and financial institutions. MKJ Group of Kolkata purchased shares from FIs. Since the mill remained closed from 1998, 500 workers had been receiving wages till recently. A tripartite settlement was arrived at to pay statutory dues and severance payments involving a cost of Rs 18 crore to the company, he said, adding that NTC would be able to use land of 82 acres for productive purposes. Mr. Pillai said that after getting the nod of promoters, the corporation would process sale of land at the centre of the Ghaziabad city and with the resolution of this “long-pending problem”, NTC, in concert with promoters, would go for commercial use of this land, either in forming an IT Park or office complexes.