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Rediff News  All News  » Business » Govt to close 12 NTC mills

Govt to close 12 NTC mills

March 28, 2007 14:55 IST

The government has decided to close 12 more mills of National Textile Corporation and invited initial bids from private players to partner the firm for modernising and reviving 18 other units.

Though the government had earlier decided to revive 30 mills through joint venture with private companies but it has called bids for only 18 of them. The rest of the mills will be closed.

NTC has so far closed 65 mills and transferred one to the government of Puducherry.

The private players will be offered 49 per cent in the 18 mills, while the 51 per cent stake will be with NTC, officials said.

The bidders can place Expression of Interest for more than one mill and the successful companies will form a Special Purpose Vehicle with the government for running them.

Out of the 18 mills on offer, 10 are in Maharashtra and two each in West Bengal and Tamil Nadu.

To ensure the viability of joint venture, the parent company will take on the existing liabilities of the mills and offer voluntary retirement scheme for its employees.

Deloitte Touche Tohmatsu has been appointed advisers by the government for the transaction.

A similar exercise for British India Corporation last year, however, failed to evoke any response as the private players had to take on the employees.

The company has already started the revival of 22 mills on its own and placed orders for new machinery. It expects to complete modernisation of the 22 mills by December 2007.
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