Friday, June 10 2022

India will seek to sell the assets of eight private companies under the Ministry of Heavy Industries this fiscal year, continuing the government’s efforts to restructure and divest many state-owned companies from non-core sectors, government officials familiar with the matter have said. the plans.

The ministry has 24 companies under its administrative control, of which 15 are operational, one is being relaunched and the other eight are to be closed. In addition, 17 others are in liquidation and are currently under the supervision of the official liquidator.

The companies that have been shut down are three units of HMT, namely HMT Watches, HMT Chinar Watches and HMT Bearings Ltd. The others are Hindustan Cables, Tungabhadra Steel Products Ltd (TSPL), Bharat Pumps and Compressors, Scooters India and National Bicycle Corporation. of India, according to the ministry’s recently released FY22 report.

In the case of Bharat Pumps and Compressors and Scooters India, the transfer of land and other immovable and movable assets is at an advanced stage. The government decided to close the two Uttar Pradesh-based units in 2020 after repeated strategic sales efforts failed.

According to the ministry, the closure of TSPL is at an advanced stage and most regulatory requirements have been met. The ministry is also proceeding with the disposal of real estate to implement the decision of the Union Cabinet to close down Hindustan Cables.

The cabinet ordered the closure of the underground telephone cable maker in 2016, while in the case of TSPL, cabinet approval was granted in 2015.

Also, among the operational companies under the ministry, Madhya Pradesh-based newsprint company NEPA is being revived. The company was returned to the former Industrial and Financial Reconstruction Council in 1998 as accumulated losses completely eroded its net worth according to the 1996-97 annual results.

The company’s production has remained suspended since July 2016. It is currently the subject of a cabinet-approved plant relaunch and development plan.

The Ministry of Heavy Industries did not respond to a query as of press time.

According to the ministry’s report, businesses that lose money suffer from a number of factors, including poor order backlog, shortage of working capital, excess labor, facilities and obsolete machines, difficulties in adapting to changing market conditions, product profile or technology and fierce competition. .

“Many of these loss-making CPSEs have significant staffing issues and huge overheads, well above industry standards,” the report said. The 16 companies have a total of 51,856 employees.

The loss-making companies under the ministry are Bharat Heavy Electricals Ltd, Heavy Engineering Corporation Ltd, HMT (Machine Tools), Rajasthan Electronics & Instruments Ltd, NEPA and Engineering Projects (India) Ltd. loss of 843.89 crore in the just ended financial year, going from a loss of 4,036.56 crores in FY21. According to the report, these companies are expected to reduce their losses combined with 474.81 crores in the current fiscal year.

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