The Hindu : Centre clarifies on textiles package

Online edition of India's National Newspaper
Saturday, Sep 27, 2003

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Centre clarifies on textiles package

By Our Special Correspondent

NEW DELHI SEPT. 26. The Centre has clarified that the scheme announced earlier this month for restructuring the high cost debt of textile units would be applicable to all units in the organised sector with a minimum debt exposure of Rs. 2 crores and that it is left to the lender to decide as to by when the stipulated debt equity ratio of 1:1.33 needs to be achieved.

In a press release, the Union Finance Ministry said that the units receiving the loans would pay the targeted interest rate of 8-9 per cent on rupee loan basis only and that the lenders would be free to extend the repayment period to beyond five years.

Likewise, it has clarified that it would be left to the lender to decide on whether to convert the working capital into working capital term loan.

The clarifications come in the wake of representations made by the Indian Cotton Mills Federation.

The package was announced on September 9 as part of an effort to help prepare the Indian textile industry become more competitive in the context of the total phase out of the quota regime by the end of next year.

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