Govt may take up EIL stake sale, SIL revival proposals Thursday
The government is expected to consider on Thursday proposals for 10 percent stake sale in Engineers India Ltd, which may fetch around Rs 645 crore to the exchequer, and a revival package for sick PSU Scooters India Ltd.
New Delhi: The government is expected to consider on Thursday proposals for 10 percent stake sale in Engineers India Ltd, which may fetch around Rs 645 crore to the exchequer, and a revival package for sick PSU Scooters India Ltd.
"The Cabinet Committee on Economic Affairs (CCEA) is likely to take up, on Thursday, the 10 percent stake sale proposal of Engineers India Ltd (EIL) as mooted by the disinvestment department," an official source said.
Besides, the Cabinet may consider the Rs 200-crore revival package for Scooters India Ltd (SIL).
"The Cabinet is expected to take up the proposal for revival of SIL through cash and non-cash assistance," said the source.
After the government shelved plan to sell out its entire stake in SIL, the Department of Heavy Industry had proposed a revival plan.
As regards to EIL, the stake sale is likely to fetch the government about Rs 645 crore at the current market price. The government currently holds 80.40 percent stake in EIL. In 2010, the government had divested 10 percent stake through an FPO in the company, a leader in engineering consultancy.
For the July-September quarter of the current fiscal, EIL reported a net profit of Rs 161.24 crore, an increase of 10 percent over the same period in 2011-12 fiscal.
The stake sale in EIL is unlikely in the current fiscal. For the current year, the government has budgeted for Rs 30,000 crore by way of disinvestment.
So far this fiscal, the government has been able to realise over Rs 6,900 crore through stake sale in PSUs. Further stake sale in Oil India and NTPC is lined up for January and February.
In case of SIL, the Union Cabinet in 2011 had given approval to divesting government's entire 95.38 percent stake in the ailing PSU to a private player through strategic route (outright sale).
But the Department of Heavy Industry had put on hold the strategic sale of SIL due to political reasons.
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.