At meeting held on 12 December 2017
The Board of Century Textiles & Industries at its meeting held on 12 December 2017 has with a view to raise funds to deliver and optimise the returns from the company's viscose filament yarn business and without transferring its underlying immovable and movable assets has approved entering into agreement with Grasim Industries, pursuant to which Grasm would be granted the right and responsibility to manage, operate, use and control the Company's Viscose Filament Yarn Business viz., manufacturing and sale of viscose filament yarn, rayon tyre cord and chemicals including caustic soda, sodium sulphide, sulphuric acid, carbon-disulphide, liquid chlorine, hydrochloride acid and compressed hydrogen M3 (VYF business) for a duration of 15 years and for a commuted royalty of Rs 600 crore to be paid by the Grasim to the Company (Right to Manage and Operate). Grasim shall also provide the Company with Rs 200 crore as interest free, refundable, security deposit and pay to the Company consideration for the transfer of CTIL's working capital to the Company, at actuals.As a part of the agreement, the Company shall grant Grasim the right to use its manufacturing operations situated at Murbad Road, Shahad, Thane, Maharashtra having capacity of 25,000 TPA and the underlying lands. The Company shall continue to remain the owner thereof. Post completion of the tenure of the agreement, the Company shall resume operation of VYF Business. The risks and rewards, and the profits and losses emanating from the operations of the VYF Business shall be to Grasim's account for the duration of the Agreement.
As a direct consequence of the agreement, the Company shall be deemed to have suspended operations of the VFY Business during the subsistence of the Agreement. The date of effectiveness of the proposed suspension is expected to be on or before 12 February 2018.
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