Govt To Initiate Selloff Process In 11 Sick Psus
The department of heavy industries will initiate the divestment programme in 11 sick public sector units (PSUs) by submitting the proposal to the cabinet by June.
These PSUs are Scooters India Ltd, Hindustan Cables Ltd, Tungabhadra Steel Products Ltd, Hindustan Paper Corporation Ltd, Bridge and Roof Company, Bharat Leather Corporation, Bharat Pumps & Compressors Ltd, Bharat Heavy Plates & Compressors Ltd, National Industrial Development Corporation, Hindustan Salts Ltd and Praga Tools.
The cabinet had cleared divestment up to 74 per cent in these units in late 1996. However, there had been little progress since then. Though merchant bankers were appointed for advising divestment in some of the units, valuation reports had not been submitted for any of them.
The ministry has now set deadlines for the appointment of merchant bankers to these units, and for the submission of the valuation report. The merchant bankers will be appointed by March for all the units. The merchant bankers would be required to submit the valuation report by May, following which the ministry proposes to take the proposals to the Cabinet for clearance.
Originally, the ministry was planning to seek cabinet clearances for all the units at one go, but it then decided that clearances for the selloff will be sought in smaller packages.
Explaining the rationale for going in for 74 per cent selloff, the cabinet note had stated that while joint venture partners would be offered up to 74 per cent equity, the rest would be retained by the government as a measure to reassure employees that their interest would be protected and to exercise control on special resolutions.
The note had further added that while PSUs provide readily available manufacturing facilities, trained and skilled manpower and professional management, the joint venture partner provide technology, modern management techniques and marketing strength. However, private partners set majority equity participation as a pre-condition. Hence the Ministry had decided to offload equity stake up to 74 per cent.