Oswal Spinning on the block

NEW DELHI: Oswal Spinning and Weaving Mills (OSWM), one of India’s oldest textile mills, is on the block. According to sources, the company has run up debts exceeding Rs 300 crore. OSWM’s investment bankers are now mulling options of selling the company to asset reconstruction firms. The company’s managing director, AK Oswal, was not available for comment. The company did not respond to an e-mail questionnaire sent by ET.

According to sources, the company owes big amounts to more than half a dozen investment banks, including IDBI Bank. When contacted, the bank also did not respond. However, a reliable source in investment banking circles said, “Against their respective debts, banks are likely to sell their rights to an asset reconstruction firm. The course that the firm will then take on, depends on factors like the ability of the promoter, life of the asset and industry prospects.”

OSWM was incorporated in 1955. The company’s core business is production of industrial yarn and sewing threads for the export market. The company also has a marginal presence in the export of woven textile. Till the late 1990s, the company was one of the major suppliers to some well-known garment companies in Europe.

However, since then, due to internal problems, the company’s financial health has deteriorated, said a source close to the AK Oswal family.