ICICI, IDBI to acquire HSWM land as part-debt recovery

A consortium of banks led by ICICI Bank and IDBI Bank have entered into an agreement with Hindoostan Spinning & Weaving Mills (HSWM) to acquire 380,000 square feet of built-up land in Mahalaxmi.

The land will be used as part-payment of the company's dues of Rs 326 crore (Rs 200 crore debt up to September 2002 plus interest till date).

The land will be developed by the K Raheja group, which has already submitted plans for a residential complex three months ago. Confirming this, HSWM chairman and managing director Sudhir Thackersey said the built-up space to be handed over to the banks would partly extinguish the company's debt.

The 1,550 workers of HSWM's twin mill units located at Mahalaxmi in central Mumbai have been fully paid their outstanding dues of Rs 42 crore, with the last instalment of Rs 3 crore paid on Thursday.

Around 2,200 workers at the Prabhadevi and Gokhale road units are, however, awaiting the state government's and the Brihanmumbai Municipal Corporation's (BMC) clearance for the development plans of the land, as was promised when the BIFR scheme was formulated over a year and a half back.

Says Thackersey, "In the case of the Prabhadevi (plot) we have written to the state government seeking the permission for developing the residential complex. Both the state governmet representative DP Chavan as well as the Brihanmumbai Municipal Corporation representative P Subramaniam had told the Appellate Authority for Industrial and Financial Resconstruction (AAIFR) on February 18, 2005, that the requisite permissions for the remaining units of Hindoostan Spinning & Weaving Mills would be granted."

The remaining units (Prabhadevi and Dadar) have an oustanding amount of Rs 51 crore in pending workers's dues and around Rs 100 crore in institutional dues.

The fate of these units would be decided only after state and BMC permissions are received and other formalities to execute the development agreeements are completed, says Thackersey.