Financial Daily from THE HINDU group of publications
Friday, Nov 29, 2002
NTC asset sale draws lukewarm response
COIMBATORE, Nov. 28
NATIONAL Textile Corporation (NTC) on the crucial Act-II of its revival plan, namely sale of assets, finds the response from the bidders for the surplus land offer from its subsidiary units across the country far below the expectations. But the top officials of the NTC's holding company maintain that based on the initial phase of land sale process being gone through, the corporation would re-strategise its asset sale to get due value for the property .
Enquiries for the surplus land put on sale are not encouraging both in terms of number of offers and the price offer quotes received. However NTC would review its strategy as to how to get the right value for the land," said Mr K.M. Chadha, Chairman and Managing Director of the NTC asset holding company (ASC).
Mr Chadha and other top officials of the corporation including Mr K. Ramachandran Pillai, whole-time director, HR, NTC headquarters, were here to attend the opening of the tenders and were of the view that notwithstanding the initial lethargy in land sale, the Rs 3,900-crore revival plan process remained `on track' very much.
He said unlike the land sale, the sale of old machinery already initiated as part of the asset sale programme was doing well with NTC realising already Rs 22 crore from machinery sale. The corporation has almost completed the valuation of its building and land assets to be put on sale.
But what pricks the NTC higher-ups most is the level of response elicited by the initial phase of surplus lands notified for sale. NTC has chosen to go by the open tender system for land sale and set the Government-fixed guideline value as the minimum `reserve price' acceptable. "We find the tenders so far received show that the response was only for 20 per cent or so of the land put on offer and the price quotes too met only 60 to 70 per cent of the reserve price we have fixed," he said.
According to NTC officials, the response remained lukewarm in major metros such as Delhi, Mumbai, Hyderabad, Bangalore where the corporation has chalked out land sale programme compared to the semi-urban pockets where the NTC holds land properties in the textile mills. "The response in smaller rural/semi-urban areas seems to be better than the urban pockets," Mr Chadha said.
While the top NTC echelons are right now concerned that their land sale programme should bring in early money to its kitty so that their Rs 3,900-crore revival programme proceeds unhindered to meet its 2004 deadline, how could they bridge the gap between the market price and the management's minimum price is to be seen. This is going to be a crucial aspect facing NTC's property disposal programme.
The officials forming the ASC's subcommittee for opening the tenders received for the land sale proposals from the Tamil Nadu NTC subsidiary included Mr Ramesh Kumar, Chairman and Managing Director of NTC (Andhra Pradesh, Kerala, Karnataka and Mahe) subsidiary holding additional charge as the managing director of the Tamil Nadu and Pondicherry subsidiary.
However, market sources say the prospects and the needs of NTC to unleash huge chunks of urban lands in the coming months that are potent enough to dip the land prices if offered at one stretch and the compulsion of transaction in `white' money with any land deals with the Government bodies like NTC are seen as the `inherent' hurdles to the public sector textile monolith in achieving its objective in the land sale. Right now, the corporation is offering only `clean lands' free from encumbrances for sale.
The guideline rates that are ruling far above the actual `market' rates in most States have also added to the `low response' of the NTC tendering.
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