The company has initiated negotiations with the workers' union for offering a voluntary retirement scheme to the 200-odd employees of the division.

The closure is perceived to be the beginning of a wider restructuring plan which will involve either the shut down or sale of other loss-making units. It is believed that the company has set the ball rolling for the sale of its spinning mill at Baroda recently. However, the retrenchment of around 800 employees of the mill is a major stumbling block for the sale, sources said.

The closure of the optics division was expected as the company had earlier announced that the operations of the division will be minimised if it could not revive it with the help of an international partner, sources said. The company had even received shareholders' approval for hivingoff the optics division.

Incidentally, Scopus was keen on becoming a strategic partner and top officials of the company had many rounds of discussions with the Israeli major. It is said that disagreements over the price had led to the break off. Scopus is engaged in the manufacture and marketing of plastic optical lenses.

The optics division has been making losses right from its inception following the failure of the Italian collaborator to provide the right kind of technology, sources said.

It is rumoured that the Rs 1,400-crore Forbes Group is readying for a major refurbishing exercise with plans to give a fresh identity to the group. This is an offshoot of the management's impression that the Forbes group, despite being one of the oldest business entities, was not given the much-needed exposure. The new plan will be implemented shortly, sources said.

Restructuring plans of the Forbes Gokak associate Swadeshi Mills got stuck as the company was unable to mop up the money for the recast. SwadeshiMills came under the BIFR fold last year due to heavy erosion in its net worth. The revival of Swadeshi Mills depends on the permission from the Maharashtra government for the sale of mill land.

Forbes Gokak holds 23.69 of the share capital of Goodlas Nerolac Paints Ltd which has been reporting profits consistently over the past few years. The Tatas hold 31 per cent in Forbes Gokak.