NTC acquired the stake in 1988 when the mill, then known as Swadeshi Cotton Mills, was nationalised by the government after a Supreme Court order. With such a large shareholding, SPL is virtually under NTC's management.

NTC has engaged the Industrial Development Bank of India to scrutinise the bids and strike deals in consultation with the textile ministry. This process is expected to be completed over the next two weeks, according to latest indications.

Itself a sick company as eight out of its subsidiaries have already been referred to the Board for Industrial and Financial Reconstruction (BIFR), NTC does not want to add to its financial burden of managing SPL which, it feels, is not economically viable.

Since its formation in 1968, the provisional accumulated net lossesof NTC and its eight subsidiaries till 1998-end stood at Rs 5,379.32 crore, going by the textiles ministry's annual report for 1998-99.

The public financial institutions have a 16 per cent holding in SPL, while the Swarup Group of the Paharpur Cooling Towers holds 23.66 per cent and the public 27 per cent.

More than one-and-a-half years ago, Gaurav Swarup, director of Paharpur Cooling Towers, had indicated in Calcutta his willingness to either buy out NTC's stake or sell its stake to NTC, stating: "I have already made this open to NTC officials". NTC got the stake without paying a rupee, he had stated.

A three-pronged revival strategy for NTC's 119 mills prepared by the textiles ministry a few months ago for consideration of the finance ministry has failed to take off as yet.

The strategy divided the mills into three categories: the first included the profitable and viable ones, second -- the unviable ones and the third included those which needed some rationalisation of work force.

Currently, 30 to40 NTC units are running profitably and the others are making losses. The government has been paying around Rs 500 crore as salary every year to over one lakh workers.