(February 21, 2011)
The Heavy Industries Ministry has sent a proposal to the Cabinet on its plans to sell stake in two state-owned sick companies -- Scooters India Ltd (SIL) and HMT Bearings Ltd, sources said on Monday.
Sources suggest the decision for the disinvestment has now been referred to the Cabinet.
"HMT Bearings and Scooters India are sick PSUs, which are beyond redemption. So, the government has proposed them for disinvestment," said a senior official at the ministry.
He added, however, that modalities like how much stake of the two companies should be sold, will be decided later.
These two companies have been putting pressure on the government exchequer and have reported losses for the last several years, said the official.
In 2009-10, SIL, in which the government holds 95.38 per cent stake, had posted a loss of Rs. 22.03 crore, while HMT Bearings' net loss was at Rs. 15.31 crore.
Earlier this month, Heavy Industries Minister Praful Patel had said that the ailing Scooters India could be considered for complete privatisation.
"There are a lot of companies under the ministry of Heavy Industries, like Scooters India, which need to be looked at differently... Some disinvestment, some outright sale," Patel had said.
He had also said that unless SIL gets fresh capital infusion, it cannot survive for long.
Located near Lucknow, SIL has an integrated automobile plant -- designing, developing, manufacturing and marketing conventional and non-conventional fuel driven 3-wheelers.
HMT Bearings is located in Hyderabad and is the only company of its kind in the public sector set-up to manufacture Ball and Roller Bearings.
Last year, the government had raised about Rs. 25,000 crore by selling its stake in PSUs like Oil India, NTPC, NMDC among others. Finance Minister Pranab Mukherjee, in his budget speech of 2010, had raised the target to Rs. 40,000 crore in state-owned firms in 2010-11.
The govenrment has, so far, raised over Rs. 15,000 crore this fiscal by listing Coal India on the bourses, while issues of Powergrid Corporation, MOIL, Engineers India, Shipping Corporation and Satluj Jal Vidyut Nigam Ltd took the disinvestment proceeds to over Rs. 22,000 crore.
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