The B K Birla group is planning to divest its entire stake in Assam Cotton Mills Ltd, a subsidiary of group flagship Kesoram Industries.
Confirming the development, Kesoram Industries Chairman B K Birla said: "We are planning to sell Assam Cotton Mills. We have got some offers from different parties but nothing has been finalised yet."
Sources in the group said it had already initiated discussions with potential buyers for selling Assam Cotton Mills.
Kesoram acquired the shares of Assam Cotton Mills in September 2004 mainly through offmarket deals.
According to sources, a few buyers had already evinced interest in Assam Cotton because of the potential value of the land. "The plant is at Tejpur in Assam and the adjacent land is huge," said sources.
However, the sources indicated that B K Birla group may look for a second option if it does not get a good price for Assam Cotton. It is learnt that Kesoram Industries could sell the land first and then could apply for winding up of Assam Cotton Mills.
"A lot depends on the price. Kesoram is looking for deriving optimum value from Assam Cotton," added sources.
Assam Cotton had suffered a loss of Rs 1.07 crore (Rs 10.7 million) in 2004-05. Most of the plants and machinery have already been sold. The group has already paid the necessary dues to the employees of the company. So if somebody takes over the company, he has to start afresh," said sources.
The accumulated losses of Assam Cotton Mills had eroded more than 50 per cent net worth of Assam Cotton. It may be mentioned that Assam Cotton Mills is the only subsidiary of Kesoram now.B K Birla group earlier merged all the other subsidiaries like Hindusthan Heavy Chemicals, Birla Tyres, KIC Investments with Kesoram in last couple of years.