Buoyed by the successful formation of special purpose vehicles (SPV) for revival of five of its ailing mills in Mumbai, state owned National Textile Corporation (NTC) is planning to repeat the strategy for 12 other mills spread across the country. The mills on the block comprise five in Maharashtra, two in West Bengal and one each in Uttar Pradesh, Orissa, Andhra Pradesh, Tamil Nadu and Kerala.

“Of our 53 mills, we intend to enter into a joint venture (JV) partnership with the private sector for revival of 17 mills. We already have JVs in place for five of them and are now coming out with an expression of interest for 17 other mills,” said NTC chairman and managing director K R Pillai. “We will still hold a majority stake in the SPV but the private company will have full management control and will make the capital infusion needed to revive the plant.”

The PSU will continue to own the real estate and other assets of the plant but lease out the land and buildings for 33 years, extendable by two more tranches of 33 years each upto 99 years. NTC will also retain most of the existing liabilities while existing employees would be offered a voluntary retirement scheme (VRS). Any job losses in the plants will be compensated for by the company’s other mills. In a similar process last year, the company had hived off mills in Mumbai to form JVs with Pantaloon Retail, Alok Industries and Bhaskar Industries. NTC had received 14 application for the five mills.