INDIA BUSINESS WORLD - MAY 2006
THE MONTH THAT WAS...

NTC TO SELL 10 MILLS FOR RS 4,000 CR

  THE Mumbai real estate market may get hot again as National Textile Corporation (NTC) is planning to sell 10 of its mills in prime locations. The real estate value of these mills is estimated at Rs 4,000 crore.

“We have sought permission of the Maharashtra government to sell the land of 10 NTC mills in Mumbai. We do not expect any major legal problem in selling them,” a source in the Union textile ministry said.

NTC had raised over Rs 2,000 crore by selling five mills in the metro last year. NTC will auction these prime properties as was done in the case of five mills. After positive verdict of the Supreme Court, the ministry expects no major hurdles in the process, sources said.

The proceeds will be utilised to revamp NTC. “The money will help use to wipe off cash loss. The funds will also help us achieve a sales target of Rs 2,000 crore by 2008-09,” an official of NTC said. The PSU is planning to leverage its retail network to sell NTC products in the domestic market under a new brand name. “We are planning to invest Rs 100 crore to revamp existing retail outlets,” the source said.    NTC has over 100 outlets in prime locations of major towns.

Through these stores, NTC is planning to sell its branded garments as an affordable price. “We will cater to the middle-class,” he said.

NTC has undergone a massive restructuring exercise. The number of employees has been brought down to 21,000 from around 3 lakh. Extra flab was cut through the voluntary retirement scheme, in which it spent over Rs 1,800 crore, raised through bonds. The first lot of bonds worth Rs 250 crore is expected to be redeemed in January 2007, where NTC will be pay over Rs 600 crore interest.