The ministry of heavy industries has proposed a Rs 119.46-crore (Rs 1.19 billion) restructuring package for 15 public sector units. The package is being put up before the Cabinet Committee on Economic Affairs and is for helping these units clear statutory and salary dues.
Among the companies that are set to receive financial aid are HMT (Watches) Ltd, Andrew Yule Ltd, NEPA and Heavy Engineering Corporation.
The money will come out of two sources -- supplementary demand available with the department of heavy industries and reappropriation from the existing non-Plan provision available with the department.
The supplementary demand will contribute Rs 102 crore (Rs 1.02 billion), while reappropriation will net Rs 17.46 crore (Rs 174.6 million). Proposals of a similar nature have been put up before the CCEA twice in the past.
The highest aid of Rs 26.69 crore (Rs 266.9 million) is being proposed for Andrew Yule, followed by Rs 22.75 crore (Rs 227.5 million) for Hindustan Cables. Andrew Yule shells out Rs 500 crore (Rs 5 billion) every year on salary and wages and has an interest liability of Rs 200 crore (Rs 2 billion) per annum.
Another of the beneficiaries, engineering conglomerate HMT, suffered a loss of Rs 23.87 crore (Rs 238.7 million) in 2004-2005. It has projected a marginal profit of Rs 15,00,000 for 2005-2006. Six HMT subsidiaries have sought an assistance of Rs 1743.69 crore (Rs 17.43 billion) from the government.
"Department of Heavy Industries secretary had earlier stated in a meeting of the parliamentary standing committee on industry that the government considered unlocking of assets of the central public sector units as a vital source of financing their revival," an official said.
The committee was also of the opinion that the central PSUs, as commercial enterprises, should be encouraged to generate finances through their internal sources.
Government officials informed the committee that the revival plans required fresh infusion of equity for capital expenditure, conversion of government loans into equity and waiver of interest on government of India loans, as also government guarantees for raising loan for working capital.
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