The Board for Reconstruction of Public Sector Enterprises (BRPSE) set up four years ago by the UPA government, to suggest among other things, revival strategies for sick public sector units, has finally begun taking some hard decisions.
The Board is exploring the possibility of a joint venture (JV) initiative for chronically sick Hindustan Cables Limited (HCL) either with a public or private sector enterprise, failing which the government would take up complete disinvestment of HCL after clearing the balance sheet of the company.
In its first three years of existence, under Prahlad K Basu’s leadership, the Board had recommended thousands of crores worth write-offs and fresh loans to 51 out of the sick 52 PSUs it was given charge of.
The Board had recommended closure in the case of just one PSU, Bharat Opthalmic Glass. An exasperated ministry of heavy Industries and public enterprises replaced Basu with former revenue secretary Nitish Sengupta in December 2007.
Minister of state for heavy industries and public enterprises Raghunath Jha told Parliament on Thursday the Board had approached some PSUs which have synergies with HCL for joint venture possibilities, but they did not respond.
The BRPSE has also published advertisements inviting expression of interest (EOI) for ventures with HCL or its individual units.
Companies like Mineral and Metals Trading Corporation and Bharat Electronic Ltd have shown interest in purchasing land in the Hyderabad plant of the ailing HCL. Some of the other companies that have expressed interest in buying or developing land and infrastructure in the Hyderabad unity of HCL are National Mineral Development Corporation and Engineering Projects ( India ) Ltd. Rashtriya Ispat Nigam Ltd said that they are interested in JV partnership and has sought six months time to submit a concrete proposal. But if these don’t translate into a feasible transaction, the Board would recommend a complete disinvestment of the PSU.
Jha also said that the Centre has approved a revival package for Andrew Yule & Co. Limited (AYCL) and as part of the package, AYCL would repay the loan granted to it by divesting its 26% stake in Tide Water Oil Company Limited. The disinvestment process is in the initial stages and EOIs from companies have not been invited yet. There are about 83 sick PSEs which have been referred to the BRPSE of which 32 PSEs have been given revival package
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