Govt seeks BIC merger with NTC for its revival

With no suitors from the private sector coming forward to run British India Corporation (BIC), the government is planning to merge it with another public sector firm - National Textiles Corporation.

"We are exploring the possibility of the merger of NTC and BIC," Union textile minister Shankersinh Vaghela said.

Sources said the merger is being explored as an option to revive BIC as no private player has shown interest in taking over the company and running it despite tenders being invited.

NTC on the other hand is sitting on a neat pile of more than Rs 2,000 crore cash from sale of its properties in Mumbai and has embarked on a more than Rs 500 crore modernisation programme.

Apart from the support of a rich organisation, the merger would open the doors for revival of BIC in more ways than one.

With the merger, the Voluntary Retirement Scheme for NTC would become applicable for workers of BIC and help the company shed excess workforce. The VRS could be funded by NTC.

According to estimates, the modernisation of BIC would require just Rs 25 crore, which is more or less equal to the support of Rs 24 crore that is being paid by the government to the company to pay the salaries of its employees.

The one-time VRS would bring down the staff strength, make revival easier and modernisation viable.

The BIC has two woolen mills - one each in Kanpur in UP and Dhaliwal in Punjab. It also has two cotton subsidiaries in Kanpur - Elgin Mills and Cawnpore Mills.