In a bid to revive the defunct Anglo French Textiles (AFT) mill or utilise the vast stretch of land belonging to the mill for other growth-oriented ventures, the government has set in motion the process of clearing its long-overdue liabilities, mainly with public sector banks.
The government had approached UCO Bank, Indian Bank, Canara Bank and Union Bank of India for clearance for a one-time settlement of the principal amount to the tune of ₹23.5 crore, which is inclusive of the capitalised principal amount (adding some portion of interest).
In a series of high-level meetings the officials had with the representatives of these banks, the government indicated its willingness to settle the amount in six months’ time, provided the banks wrote off interest to the tune of ₹13. 4 crore.
“It became a Non Performing Asset in 2015-16 itself. We have had at least three meetings with the local heads of these four banks and had also written to top executives, requesting approval for a one-time settlement. Our contention is that we have paid interest for a long time, and now, the mill itself has become defunct, so we need to have some sort of restructuring,” a top official told The Hindu.
“Clearing the liabilities with the banks is a must to take a policy decision to revive the mill or use the land for other economic activity, as the entire property of the mill is pledged with these four banks. We need to get possession of the land before taking any decision,” the official said.
The AFT owned 36 acres of prime land at Mudaliarpet, 55 acres at Pattanoor and 14 acres at Iyyankuttipalayam. “The market value of these properties is at least 40 times that of the loan taken from the banks. So, we need to settle the loans first,” another official said.
The total liabilities of the mill, including loans and pending payments to workers, were around ₹200 crore when the venture stopped all operations in April 2020. Once the liabilities with the nationalised banks are settled, the government could then move ahead with a plan to settle the dues of government-controlled Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC) and Puducherry Power Corporation Limited (PPCL). While AFT owed ₹16 crore to PIPDIC, the mill had to settle dues to the tune of ₹10 crore with PPCL, the official added.
As regards the dues to workers, the officials said that in the last three years, the government made payments to the tune of ₹100 crore. “We may have to spend ₹30 crore to ₹40 crore more to clear all the dues of employees,” the official added.
The government recently approached the banks for a no-objection certificate to auction the movable assets of AFT, including machinery and building scraps. The Metal Scrap Trade Corporation Limited, a venture under the Union Ministry of Steel, had been appointed as the nodal agency for the purpose. “The amount received through the auction could be used to settle all the remaining arrears of employees,” an official said.
The government is keen on reviving the mill in a new format or use the land for growth-oriented ventures. “It’s a fact that a huge stretch of land has been lying idle for several years. The revival of the mill or the utilisation of the land in partnership with private entities for growth/job-oriented ventures is one of the top priorities of the government,” he added.
In fact, during the President’s rule last year, the two advisors of the Lt. Governor appointed by the Union government had submitted a detailed report to the Union Ministry of Home Affairs, suggesting the utilisation of the land owned by the mill for economic activity, including the setting up of a textile park, the official said.
