The Hindu : Business : Ministry wants to sell residual stake in MUL

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Tuesday, Aug 22, 2006

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Business

Ministry wants to sell residual stake in MUL

Special Correspondent

Schemes for revival of BHPV, Bharat Pumps

NEW DELHI: The Heavy Industry Ministry has suggested selling its remaining equity stake in Maruti Udyog Limited to raise over Rs. 2500 crore. The proposal has been made to the Finance Ministry, according to Heavy Industry Minister Sontosh Mohan Dev. "Now it is up to them to take the call", he said.

At present the Government has only 10.24 per cent shareholding in MUL. This is expected to yield about Rs. 2,500 crore at current market prices. The sale of eight per cent shares last year to public financial institutions had enabled the Government to raise over Rs. 1,567 crore. At the current low level of equity stake, the Government does not even have a director on the board of the company.

Speaking to newspersons here on Monday, Mr. Dev said the Prime Minister had agreed in principle to release Rs. 138 crore for liquidating the salaries and other statutory dues of public sector enterprises under his Ministry.

Rs. 350 cr. package

This formed part of the Rs. 350-crore package meant for this purpose for all public sector enterprises. With this package, he said, the total assistance by the government to pay arrears of workers of loss-making PSEs in the last two years had crossed Rs. 800 crore. Mr. Dev said, the Government would provide additional capital in the tractor unit of HMT, which has started making profits.

He said the scheme to involve profit-making companies in revival of sick units had been initiated. In the case of Bharat Heavy Plates and Vessels (BHPV), the two PSEs, Bharat Heavy Electricals Limited and Engineers India Limited would take the lead in supporting the company. In the case of Bharat Pumps and compressors Ltd., Oil and Natural Gas Corporation and BHEL will play the role of the rescuer, he said.

As for the takeover of lubricant company Tide Water Oil by ONGC, he said ONGC had completed the due diligence for this purpose. Tide Water Oil is a subsidiary of Andrew Yule. The company is being sold to ONGC as part of the package of revival of Andrew Yule. Mr. Dev said that to support small and medium auto component units, the Government is setting up an Institute of Forging. The Government would give Rs. 22 crore for the institute that would be ready in the next 12 months, he said.

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