"The deals are expected to be finalised well before the close of the financial year and would fetch the company close to Rs 200 crore and would help the company reduce its high cost debt. We are willing to offer only a minority stake stake in the spun-off garments division. Arvind will retain the majority stake," said Roy.

When asked that will the spin-off affect the existing shareholdder's interest, Roy said, "the sale of stake will only be a minority one and would bring in the funds which will be used to prepay the high cost outstanding debt thereby improving the bottomline." Earlier, the questions were raised that whether the company would be issuing free shares to compensate the existing shareholders, but Roy declined to comment.

The Ahmedabad-based Arvind Mills is already fighting a rising interest burden that has pushed the company into the red in the first half of current fiscal. The company's outstanding loans (secured and unsecured) as on March 1999 stood at Rs 195 crore. Interest outflow for the first six months ended September 1999 was Rs 81.86 crore against Rs 31.08 crore for the year ended March 1999. On the anvil is a Rs 100-crore transaction from the sale of Arvind's `Capital Court', the corporate building in New Delhi. The property has a built-up area of 1,10,000 sq. ft.

The garment division manufacturers and markets jeans, cotton trousers, formal and casual shirts and T-shirts under brands Arrow, Lee, Newport, Flying Machine/Ruggers, Excalibur and Ruf & Tuf. These brands are currently market leaders in their respective segments. The net consideration for the basket of brands is likely to be around Rs 120 crore though the deal is yet to be frozen.