After legal disputes over 15 years, hopes for the revival of the UP Cement Corporation (UPCC) have brightened, with the closed PSU being awarded to Jai Prakash Associates. This was done in an open bidding process conducted by the Allahabad High Court on Monday. | |
| JP Associates, better known as JP Cement, was the highest bidder with Rs 459 crore. The other bidders were Lafarge India Pvt Ltd (Rs 271 crore), Dalmia Cement (India) Ltd (Rs 271 crore), and Grasim India Ltd (Rs 271 crore). |
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| The High Court had set Rs 271 crore as reserve price for open bidding. Grasim India, however, backed out at the eleventh hour and did not participate in the bidding process on Monday. Grasim sources refused to comment on this. |
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| The High Court has directed the asset sale committee, set up for the liquidation of the assets of the PSU, to finalise the modalities of payment by the successful bidder and submit a report after 10 days. |
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| The Court has set February 15 as the next date of hearing. It has also directed the committee to return the earnest money of Rs 10 crore each deposited by the three other bidders. |
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| The Court has directed the successful bidder to deposit 25 per cent of the bid money within 30 days and furnish bank guarantees for the remaining 75 per cent in a year. The three factories of UPCC--Churk, Dalla and Chunar--are located in the Mirzapur district. |
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| The UP government has written off the outstanding government loans of Rs 165 crore, besides the outstanding power dues of over Rs 100 crore and a similar outstanding amount on account of trade tax and royalty on limestone, the raw material mined by the cement unit. The state government has also given the undertaking to exempt the unit from trade tax and royalty on limestone for 10 years. |
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| Chief Minister Mulayam Singh Yadav in December 1989 had announced the privatisation of the UPCC. Sanjay Dalmia of Dalmia Cement took over the company in early 1991. Violent protests by the workers broke out against the privatisation and police had to open fire to quell violence at Dalla plant in May 1991. |
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| In June 1991, the Kalyan Singh government took over and succumbing to the popular sentiment against privatisation, the UPCC was again nationalised in October 1991. |
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| Even after the nationalisation, the UPCC could not recover and soon it was closed again and never reopened since. In the mean time the BIFR ordered the liquidation of the UPCC, which was also endorsed by the Allahabad High Court and it also appointed the liquidator for the UPCC. |
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| In 2000, the Rajnath Singh government invited global tenders for the liquidation of the company. The government move was challenged in the High Court, which quashed the global tender process. |
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| On the directives of the High Court global tenders were again floated in 2005, and high court formed the "asset sale committee" (ASC) for supervising the process of liquidation of the UPCC. The committee comprised SK Saxena, official liquidator, who is from the ministry of company affairs; nominees of the IDBI and SBI; Ravindra Singh, principal secretary (industries) to the UP government; and a nominee of the UPCC. |
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| On the suggestion of ASC global tender was floated on August 4, 2005. Pre bid conference was held in December 5, last year. The bidding process was finalised on January 18 and completed on Monday. UPCC is the first case where a PSU is likely to revive with the judicial intervention. |
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