The ministry is finding it difficult to accept the Rs 12 per share offer, though it represents a Rs 2 per share increase over the Swarup Group's previous quotation, after bids were invited by NTC. The Swarup Group has a 23.66 per cent holding in SPL, while the financial institutions (FIs) have 16 per cent, and the public 27 per cent. Once the Swarup Group's offer is accepted, the FIs are expected go along with NTC and divest their stake as well, facilitating SPL sell-off.

The textiles ministry is however, keen that NTC accept the offer, which it considers as "worthwhile", and divest its holding in SPL after receiving a "firm" commitment from Paharpur Cooling Towers, that it will run SPL on efficient lines and also take care of workers interest. The exact number of workforce to be retained after the sell-out has not been decided.

Notwithstanding this, NTC is facing another roadblock. A private party, to whom SPL owes some money for supplies made by it, has initiated liquidation proceedings in the Allahabad HC. The Court's verdict is awaited.

NTC acquired the stake in 1998 when the mill, then known as Swadeshi Polytex Ltd, was nationalised by the government after a Supreme Court order. With such a large shareholding, SPL is virtually under NTC's management. But there has been no production in the fund-starved SPL for the past one and a half years. IDBI was engaged by NTC to scrutinise the bids and strike deals in consultation with the textiles ministry. Initially, the date for receiving bids was fixed as July 31, 1999, which was later extended to August 31 of the same year. Subsequently, Indo Rama and Indian Petrochemicals Corporation had evinced interest in buying up the shares but their offers could not be accepted. NTC is a sick company, as eight out of its nine subsidiaries have already been referred to the BIFR.