National Textile Corporation is in talks with the Maharashtra government to sell the land of 10 remaining mills in Mumbai which could fetch about Rs 4,000 crore (Rs 40 billion).
"NTC and the Central government is talking to the Maharashtra government for allowing the sale of 10 more mills' land in Mumbai. The sale will fetch NTC around Rs 4,000 crore," sources said.
NTC had raised Rs 2,000 crore (Rs 20 billion) last fiscal by selling the land of five mills in Mumbai through auction.
The company will be utilising the proceeds of the sale to get back on its feet.
NTC expects to wipe-off its cash loss by this fiscal and plans to touch a turnover of Rs 2,000 crore (Rs 20 billion) by 2008-09.
The company had 282 retail outlets of which only 100 remain and NTC plans to utilise them for selling its branded products.
To restructure its operations, it had brought down the number of employees from three lakhs to 21,000. For funding voluntary retirement scheme, it had raised Rs 1800 crore (Rs 18 billion) through bonds in tranches.
The first tanche of bonds worth Rs 250 crore (Rs 2.5 billion) would be redeemed in January 2007. The company will be paying Rs 650 crore (Rs 6.5 billion) as interest on these bonds.
As part of the restructuring, NTC will modernise 22 mills on its own with a total cost of Rs 530 crore (Rs 5.3 billion), while 29 will be revived through private participation.
NTC has already placed an order for machinery for five mills with China Texmatech Company.
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