Lenders led by Canara Bank may merge Gangotri Textiles with a bigger player to recover their dues which stand at Rs345Cr.

The problems started when Gangotri borrowed Rs257Cr 11 year loan at 8% per annum for vertical integration but was not able to pay-off due to various reasons.

Gangotri invested Rs 351 crore for its vertical integration drive that saw the company foray into weaving and processing. While part of the expenses was met through a follow on public issue, nearly Rs 240 crore was raised as loan from banks during the past three years.

Other lenders to the company include State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, Bank of Travancore, Corporation Bank, Syndicate Bank and United Bank of India.

Company`s Financial Performance

* In Rs. million

The company may also sell some assets including some of it`s partially completed projects to pay off the loans. Other assets which can be sold include weaving and processing unit together with all other facilities located at Sipcot Industrial Growth Centre, at Perundurai in Erode district, ring spinning unit together with all other facilities including the furnace oil power generation at Pushpattur, around 25 acres vacant land at Sullakkal village, 26 acres of land at Munduvelampatty and 1.6 acres of land at Kalappatty village near Coimbatore.

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