The promoters of the Ispat group, Mr. Pramod and Vinod, the Mittal Brothers are planning to exit the textiles business. The promoters are likely to shut down their textile business and to focus on steel manufacturing, their core activity. The Ispat group has interests in textiles through GPI Textiles, which has a unit based in Nalagad, Himachal Pradesh. GPI textiles was earlier a part of Gontermann Peipers India that manufactures rollers used in making value-added steel. GPI was later sliced off in to a separate subsidiary. The textiles business will be sold off to a suitable buyer, this is according to sources. Mr Anil Sureka Finance Director Ispat said, the group is looking at various options to move towards higher profitability and value creation. According to sources, the Ispat group has decided to focus only on core activities and business related to steel. This implies that the company will continue to have Gontermann and Balasore Alloys in its portfolio while divesting GPI Textiles. GPI is
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| a closely-held company and has a turnover of over Rs 250 crore and an EBIDA of around Rs 20 crore. It is, however, likely that the group, which has been through serious financial crises, may have been advised by the financial institutions to focus more on its core businesses. After incurring losses earlier, GPI Textiles has just managed to make cash profits in fiscal ’04-05. The group has also looked at options to revive GPI Textiles. Ispat Industries (IIL), the flag ship of the Ispat Group, however, has not been able to stay profitable after steel prices dropped by over 30% in the past six months. IIL promoters are likely to need more funds to invest in their steel business and overseas acquisitions. The cash generated from full or partial sale of GPI Textiles can be used to fund capital expansion projects of IIL. The promoters can also use the cash to increase their stakes in IIL, which has fallen to 51.5% from 54.5% after the merger of Ispat Metallics India in to IIL. The merger was carried out in accordance to the pre-conditions laid down by the lender. 
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