The government has decided to close 12 more mills
of the National Textile Corporation (NTC) and revive 18
other units in partnership with the private sector.
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
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.
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.
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.
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
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.