| Engineers India (EIL) has turned down a proposal to take over Mecon Ltd. The Board for Reconstruction of the Public Sector Enterprises had recommended that EIL acquire the public sector unit, under the aegis of the steel ministry, but EIL felt the takeover would inflate its wage bill without resulting in any value addition.
|
| |
| In a letter to the ministry of petroleum and natural gas, EIL expressed its inability to acquire the company. It has been proposed that EIL must consider an investment of Rs 28 crore in Mecon. The company is willing to make a cash infusion, if directed by the government.
|
| |
| EIL already has more than 2,800 employees, while Mecon has over 1,500 employees. While both are mini ratnas in Schedule A of the list of Central Public Sector Enterprises, Mecon has been incurring losses since 2001 and had a negative net worth of Rs 227.62 crore in 2003-04, though it turned around in 2004-05.
|
| |
| The BRPSE had recommended a huge capital infusion into Mecon to capitalise on the upsurge in the steel sector. To attract technologically oriented turnkey projects the company needed financial restructuring support, said a member of the board.
|
| |
| EIL provides industrial development and technology consultancy services. It offers services in process design, engineering procurement, construction management and commissioning.
|
| |
| It had a turnover of more than Rs 1,200 crore in 2003-04, while its net worth stood at Rs 762.66 crore. The company made a profit of Rs 95 crore in 2004-05.
|
| |
| Mecon provides design engineering and consultancy services to the iron and steel industries, including setting up of integrated steel plants.
|
| |
| It had a turnover of Rs 270.75 crore in 2003-04 and was incurring losses of Rs 10.72 crore in 2003-04 but saw a turnaround in 2004-05 when it recorded a profit before tax of Rs 10.68 crore.
|
| |
| In view of the cyclic investments in the steel sector, Mecon had forayed into a number of diversified sectors, especially oil, gas, power and infrastructure. |
| |
|
| |
Content Guide
