Mumbai, Feb. 5 :    Mumbai, Feb. 5:  Arvind Mills, the ailing Ahmedabad-based textile major, announced a restructuring plan aimed at reducing the burgeoning debt burden and improve the financial health. Under this plan, the lenders have been given three choices - debt buyback, a lower interest rates on debt remaining after buyback and sharing of upside in case Arvind Mills does well, and lastly, monitoring and control mechanism by the lenders. The company has stipulated February 28, 2001 as the deadline for the lenders, on whether they accept or reject the restructuring proposal. 'We have some 60 lenders and most of them have supported the proposal,' an Arvind Mills spokesperson said. Under the debt buyback scheme, Arvind Mills would buy a minimum of Rs 550 crore of debt. All overdue interest would be waived. Buyback price will be in full settlement of the debt. Lenders have three choices. Under Scheme A, 48 per cent of the principal will be paid in full settlement for a lender reinvesting 6.42 per cent of the principal in rupee denominated reinvestment debt. Under Scheme B, 45 per cent of the principal will be paid in full settlement. Under scheme C, 60 per cent of the principal will be paid in full settlement. Debt not bought back, will be restructured with effect from April 1, 2000. The lenders are offered three choices, the first one has a tenure of five years, the second and third options have a tenure of 10 years. The interest rates offered on 10-year schemes give an average yield of 9 per cent. Lenders opting for the 10-year schemes will be offered re-compensation payment and equity warrants to compensate for their sacrifices. Arvind Mills has agreed to lenders' representatives appointing four directors and choose another four directors from a list of three names provided by Arvind Mills for each position. An independent auditor will monitor the cash flows. The proposal is based on forecasts made by KSA Technopak, an Indo-US consultant. The company appointed the consultant as lenders sought a report on prospects of the textile industry and Arvind Mills' business plan. 'Arvind's fortunes are poised to look up as a result of significant reduction of debt burden on the one hand, and on the other hand, expected improvement in the operating performance due to rising denim demand, improved capacity utilisation of the new plants and softening prices of naphtha, a fuel used in the generation of power,' said Sanjay Lalbhai, managing director.