Cabinet approves revival plan for Heavy Engineering Corp

25.01.2006
The Cabinet has cleared the proposal for reviving Heavy Engineering Corporation (HFC), a sick state-run-company manufacturing equipment for the iron and steel industry.In an innovative restructuring proposal, the Cabinet has decided to form a committee under the Cabinet secretary to ensure that a certain number of orders form the steel and coal sector are awarded to HEC.The revival plan includes conversion of the Plan loan of Rs 15 crore -27 crore into equity,waiver of a non-plan loan and interest on Plan and non-Plan loans and provision of a non-Plan bridge bridge loan of Rs 102 crore.

"Fresh cash infusion from the government is essentially the bridge loan that is being given.Besides this, the company will raise around Rs 300 crore through the sale of assets, to pay back the loan and other dues," a government official in the heavy industry said.The recast proposal includes settling electricity dues of the Jharkhand SEB of Rs 500 crore, and a Rs 73-crore liability payable to the CISF by transferring of an equal amount of land to the creditor.Further,around Rs 330 crore will be raised by transferring residential and non-residential buildings on rent with theJharkhand government and privatising schools and hospitals run by the company.