Textile debt recast package revised

 It also stipulated that companies tapping external commercial borrowings would be required to repay their dues within 5 years, but the tenure of rupee loans would be longer.

 The scheme, announced earlier this month, has been revised by the finance ministry following concerns expressed by the India Cotton Mills Federation.

 In an official statement, the finance ministry said banks and financial institutions could access ECBs and convert rupee term loans into foreign currency loans. Also, the interest paid by textiles companies on foreign loans would be in the range of 8-9 per cent on a rupee loan basis.

 The ministry also said the conversion of working capital into working capital term loan would be left for lenders to decide and the interest rate on working capital loans would be fixed in line with the guidelines of individual banks and FIs.

 The government also dropped the reference to payment of dividends for healthy textiles units which were paying dividends and can avail of assistance from the Textiles Upgradation Funds scheme.

 The choice of agencies for assessing the technical viability of companies had been left to the textiles ministry, the press release said.

 The government had announced a debt restructuring package for textiles companies which entails reduction interest rates by lenders and an element of budgetary support for units to reduce interest rates on debt to single digit levels.