Govt to consider Rs 200 cr revival package for Scooters India
The government is likely to consider over Rs 200-crore revival package for sick PSU Scooters India Ltd (SIL) on Thursday this week.
New Delhi: The government is likely to consider over Rs 200-crore revival package for sick PSU Scooters India Ltd (SIL) on Thursday this week.
After the government shelved plan to sell out its entire stake in SIL, the Department of Heavy Industry had proposed a revival package of more than Rs 200 crore for revival of the company, sources said.
"The Cabinet, on Thursday, is expected to take up the proposal for revival of SIL through cash and non-cash assistance," they added.
Besides, the department had consulted the Board for Reconstruction of Public Sector Enterprises (BRPSE) which examined the case and later suggested a revival package.
While cash assistance implies equity infusion, grants and loans, non-cash assistance includes waiving interest, government loan and conversion of loan into equity.
In 2011, the Union 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 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.
Shares of Scooters India on Monday closed at Rs 33 on the BSE, up about 10 percent from their previous close.