Govt defers proposal for revival of Scooters India
New Delhi: The government on Thursday deferred a proposal for the revival of sick PSU, Scooters India Ltd (SIL).
"The Cabinet has deferred the proposal for revival of Scooters India due to absence of Heavy Industries and Public Enterprises Minister Praful Patel in the meeting," a minister said after the Cabinet meeting here.
After the government shelved plan to sell out its entire stake in SIL, the Department of Heavy Industry (DHI) had proposed a revival package of more than Rs 200 crore for revival of the company.
The revival includes both cash and non-cash assistance by the government, they added.
While cash assistance implies equity infusion, grants and loans, non-cash assistance includes waiving interest, government loan and conversion of loan into equity.
Besides, the DHI had consulted Board for Reconstruction of Public Sector Enterprises (BRPSE) which had examined the case and later suggested a revival package.
In 2011, the Cabinet had given approval to divesting government's entire 95.38 percent stake in Scooters India to a private player through strategic route (outright sale).
But the Department of Heavy Industry decided to put on hold the strategic sale of ailing public-sector unit SIL.
The automobile company, which has about 1,200 regular employees, has been incurring losses since 2002-03. In March 2009, the company was declared sick.
Incorporated in 1972, SIL initially manufactured scooters under the brand name Vijai Super for the domestic market and Lambretta for overseas markets.
Later, it ventured into the three-wheeler segment with the Vikram brand. In 1997, it stopped two-wheeler production and is now engaged in the manufacture and marketing of only three-wheelers. SIL's net loss (before tax) stood at about Rs 20 crore during the 2011-12 fiscal.
SIL scrip was trading at Rs 41.65 on the BSE in the afternoon session, up 4 percent from their previous close.