Mahavir Spinning Mills is to seek shareholders' approval at next week's annual general meeting for mortgages securing a loan.

The spinning mill got a term loan of Rs155 crore during the fiscal year 2000-01 from ICICI to expand and modernise its Malerkotla Unit, expand its mercerised yarn unit and set up a new sewing thread unit.

Now the company is seeking a resolution to be passed under Section 293 (1)(a) of the Companies Act at the AGM on August 14.

The section means the board of directors of a public company cannot sell, lease or dispose of the whole or substantially whole of the company without the consent at a general meeting.

A mortgage in favour of ICICI may be regarded as disposal of the company's properties or undertakings.