The Cabinet has given its nod for a strategic sale of sick public sector firm Bharat Pumps and Compressors, and for the closure of Hindustan Cables that has stopped output since 2003.
It has also approved an outlay of more than Rs.4,800 crore to pay statutory dues to these firms’ employees and creditors.
“The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved a proposal to provide a non-Plan loan to the Allahabad-based public sector unit (PSU) Bharat Pumps and Compressors Limited,” HRD Minister Prakash Javadekar said.
The CCEA also granted ‘in principle’ approval for strategic disinvestment of the company that will be carried out at a latter stage, the minister said. A Rs.111.59 crore loan would be used to settle outstanding statutory dues payable to its retired employees such as provident fund and gratuity as well as dues payable to the Central Industrial Security Force.
Golden handshakeSeparately, the cabinet approved the closure of Hindustan Cables by offering a golden handshake to its employees and a Rs.305 crore one-time settlement to a consortium of its lenders led by State Bank of India.
In all, the Centre has agreed to bear Rs.4,700 crore to fund the unit’s closure, of which cash infusion will be Rs.1,309.90 crore and non-cash infusion of Rs.3,467.15 crore whereby the Government of India’s loan and interest dues pending on the company’s books, would be converted to equity.
“There is no production activity in the company since January 2003. Due to non-payment of salary and wages, it is very difficult for the employees to survive...With the present time bound closure of the company, the valuable assets of the company will be available for other optimum utilization,” according to an official statement.
Meanwhile, the department of public enterprises (DPE) under the ministry of heavy industries and public enterprises has asked ministries to close non-strategic PSUs that have no specific hope for revival in a time-bound manner.
Revival strategyAs per its guidelines, public sector firms were to be categorised into strategic or non-strategic and ministries were to prescribe their revival or restructuring strategies. The department has stressed that the Centre has decided on an uniform policy for offering voluntary retirement to workers of firms that can’t be revived and modalities for disposing off their assets.
“The guidelines prescribe that leasehold land would be dealt as per the terms of the lease and freehold land would be offered in following order of priority, to central government departments, central government bodies and public sector enterprises, state government departments and state government bodies or public sector firms,” the DPE noted.
In case such entities are not interested in taking the land of a PSU that is being wound up, for six months, then the land would be auctioned so that it can be put to productive use.
