Thursday, May 29, 2014

Government to sell stake in sick PSUs

Arun Jaitley, new FM
THIS is not a good news for the employees of sick PSUs hoping for some revival packages from the new government. Instaed of providing a lifeline to these loss-making PSUs, the Narendra Modi-led new BJP government is considering stake sale...
in these sick entities. The Centre is likely to dispose off its residual stake in HZL-Balco and...
will also take a call on sale of stakes in sick PSUs. These issues figured prominently in the presentation by the department of disinvestment to new finance minister Arun Jaitley.
"We will go ahead with appointing valuers for HZL-BALCO stake sale. Cannot give a time-frame for stake sale," department of disinvestment (DoD) secretary Ravi Mathur told reporters after meeting the finance minister. He also said the DoD is in the process of identifying sick PSUs for a possible disinvestment. The interim Budget had made provisions of Rs 1,500 crore for revival of loss-making PSUs. These sick PSUs include HMT Ltd, HMT Chinar Watches Ltd, Bihar Drugs & Organic Chemicals Ltd, Nagaland Pulp & Paper Co. "We are yet to start the process of identifying the loss making PSUs. We have to start the process," Mathur said.
"We apprised him (the Finance Minister) of the current policy. He wanted to understand how the last minority stake sales went through," he added.
As per the interim Budget, the disinvestment proceeds have been pegged at Rs 36,925 crore and another Rs 15,000 crore from stake sale in HZL-BALCO. The government holds 49 percent stake in Balco and 29.5 percent in Hindustan Zinc Ltd (HZL).
During 2001-03, the government had sold majority stake in the two erstwhile PSUs to Vedanta group. At present, London-listed Vedanta holds 64.92 percent stake in HZL and 51 percent in Bharat Aluminium Company (Balco).
In January, 2012, Vedanta had proposed acquisition of government's remaining stake in the two erstwhile PSUs for about Rs 17,275 crore.
In October, 2012, shareholders gave their nod to raise offers for acquiring the remaining government stake in HZL and Balco by up to 43 percent or Rs 24,663 crore.

1 comment:

  1. HMT Ltd is holding company and HMT Machine Tools, HMT watches, HMT Tractors, HMT Bearings, HMT Chinar Watches & HMT(I) Ltd. are the subsidiaries. Hence when Government talks of HMT Ltd., it seems that govt. is caring for holding company not of subsidiaries.