Having failed to find a buyer for its entire stake in Burn Standard Company Ltd to a private party, the government has reportedly sent a proposal to the department of divestment to attempt to sell only 60 per cent in BSCL through a fresh round of bidding. The proposal is awaiting DoD clearance. BSCL is under the heavy industries ministry.
The company has been asked to conduct an unit-wise revaluation of assets. A new restructuring package will have to be submitted before January 31 next year.
BSCL's operating agency and the Board for Industrial Finance and Reconstruction came down heavily on the Burn Standard management and the government for trying to sell off the company without having revalued its assets.
The central government had asked for a three-month extension for preparing a new proposal for the company.
This was not granted by BIFR, which instead directed the management and the government to prepare a package by January 31.
It has also asked the central government and the BSCL management not to issue any divestment notice or
BIFR simultaneously directed the government to clearly state the benefits or concessions it was offering to a potential joint venture partner or any entity willing to buy the government stake.
On the valuation front, BSCL's assets were last revalued at close to Rs 400 crore (Rs 4 billion) by SBI Capital Markets in 1999. Thereafter, its refractory units and some other units were closed down.
Further, three years have passed since the last revaluation and the asset valuation has changed.
Analysts indicated the valuation would have gone down over this time. This time BIFR has directed the government to make an unit wise revaluation of the assets of the company within the January 31, 2003, deadline.
Meanwhile, the West Bengal government, which provides grants and concessions to units of BSCL located inside the state urged BIFR to direct retention of the Burnpur unit, which has turned profitable.
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