Govt to revive Elgin Mills

New Delh: The government has reworked its plan for revival of public sector textile company Elgin Mills in Kanpur and is going to rope in private players to run the company.

The government will be floating a special purpose vehicle (SPV) for the company's revival in which private players will hold a majority stake, sources said.

To advise on the revival through SPV, the government has decided to call the bids from merchant bankers.

The last date for submission of bids is 27th July.

The bankers would be required to advise the government on the modalities of the formulation of the SPV to ensure best returns and generate interest among prospective parties.

As part of the revival plan, the government had decided to close down number two mill of the company and revive Mill one.

For the revival of Mill two, it had approved a plan of Rs 98.58 crore for which resources were to come from the sale of land and other assets of Elgin Mills which were valued at Rs 126.5 crore. It also included government support of Rs 39.6 crore to liquidate dues of secured creditors, waver of government loan and conversion of a part of it in to equity.

Elgin Mills was acquired by the government in 1981 and manufacturers textile piece goods. It has two units out of which one stopped functioning in 1994 and a year later the second unit also stopped.

At one point of time, all approvals had come for winding up of Elgin Mills and an official liquidator was appointed.

However, after the government decision to revive one mill the Appealette Authority Industrial and Financial Reconstruction remanded the case of Elgin Mills back to Board for Industrial and Financial Reconstruction in November last year.