(NTC is planning to modernise its 18 textile mills under joint venture route through the creation of special purpose vehicle (SPV), chairman and managing director K. Ramachandran Pillai said.

He said the SPV, which plans to take advantage of the public-private partnerships (PPP) model, has invited initial bids from private parties to partner the firm in modernising and reviving the 18 units.

Of the 18 mills to be brought under the modernisation plan, as much as 10 are in Maharashtra with Mumbai city alone holding four mills, while the balance eight mills consists of two each in Tamil Nadu and West Bengal and one each in Kerala, Uttar Pradesh, Andhra Pradesh and Orissa.

The government had earlier decided to revive 30 mills through joint ventures.

The strategic partners (SPs) are expected to contribute funds required for the modernisation and expansion of the mills and bring in the management expertise.

Under the partnership agreement, asset-stripping would not be allowed under any pretext and the valuation of assets would be done in such a way that it is neither too low nor too high to deter prospective investors from pumping in funds to modernise these mills, he said.

NTC would hold 51 per cent of the share capital of the SPV while the remaining 49 per cent with management participation in the mills will be offered to the strategic partners.

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

The bidders can place expression of interest (EoI) for more than one mill and the successful companies will form a special purpose vehicle with the government for running them.

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

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