COIMBATORE: The year ahead (2007-08) can turn out to be a historical one for the public sector National Textile Corporation (NTC).

The NTC, which once controlled 119 mills across the country through its nine subsidiaries, embarked on a restructuring programme in 2002. At that juncture, the company was saddled with a bundle of problems. In 2002-03, it had registered a cash loss of Rs. 454 crore, its dues to financial institutions were Rs. 260 crore, and almost all its subsidiaries were incurring heavy losses.

It needed a revival package to set things right. The corporation chalked out a proposal (a self-financing revival scheme) and the process took off in 2002-03. The current fiscal is the terminal year for the revival programme and, if things go according to plans, it will be a complete turnaround for this organisation.

The corporation is now a single entity. All its subsidiaries have been merged to bring down the overheads drastically. It has just 22 mills directly under its control and is going through a modernisation process costing Rs. 530 crore. A joint venture plan has been drafted for another 18 mills that have been identified as viable for revival. It registered a cash loss of Rs. 90 crore in 2006-07, and aims to completely wipe it out this year.

"The NTC should make profits this year," emphasises its chairman and managing director, K. Ramachandran Pillai. This year, NTC wants to record a minimum turnover of Rs. 716 crore.

A reorganisation of its board, bringing in six independent directors, is also on the cards. Entyce, the corporation's retail arm, also comes into the revamp process. The details are to be finalised soon.

"As part of a major restructuring exercise, the mills have started getting high technology machines. The corporation now needs financial restructuring," says Mr. Pillai. Its accumulated loss of Rs. 6,000 crore (loan and interest) needs to be written off or converted into equity. The Union Finance Ministry already has a proposal from the NTC for this process under its consideration. Financial restructuring becomes imperative for NTC.

It has so far realised Rs. 3,347 crore from sale of assets (land and machinery) of mills that were identified as unviable. It hopes to get about Rs. 3,000 crore more from the remaining lands of these mills.

Voluntary retirement scheme tops the list on NTC's expenditure column as the corporation reduced its strength from 85,000 to about 18,000 in the last four years. The VRS alone involved an outgo of Rs. 1,941 crore. The corporation has taken Rs. 2,028 crore on private placement to meet its VRS expenses.

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