The Confederation of Indian Textile Industry (CITI) has forwarded applications for debt restructuring of 300 textile units to the Ministry of Textiles.
The debt of these 300 textile mills, that include spinning, weaving and processing units from all over the country, is approximately around Rs. 120 billion.
The step by CITI was in response to the Reserve Bank of India’s direction earlier this month asking all banks to consider debt restructuring of the Indian textile industry on a case-by-case basis.
The apex bank had advised the banks to open special windows for textile debt restructuring between August 1 and October 30, 2012.
“We have sent cases of 300 units that are seeking debt recast to the Ministry of Textiles. They will send the bank-wise list to Finance Ministry for allowing debt restructuring for these units,” Mr. DK Nair, Secretary General, CITI informed fibre2fashion.
“The debt restructuring will cover a two-year moratorium on repayment of principal amounts of term loans and conversion of eroded working capital into working capital term loans (WCTL),” he adds.
“The expectation is that the list would be forwarded by the Textiles Ministry to the Finance Ministry, which will then send the list to the respective banks for implementation of the restructuring package,” he says.
The debt restructuring is expected to provide sufficient liquidity to the textile industry and help it better meet export orders, in view of the US market beginning to show signs of revival.
Fibre2fashion News Desk - India