A consortium of three government-owned companies — Bharat Earth Movers Ltd (BEML), Coal India Ltd (CIL) and Damodar Valley Corporation (DVC) — on Friday emerged as the highest bidder in an auction held to sell the movable assets of public sector Mining and Allied Machinery Corporation (MAMC) based in Durgapur. It is now set to acquire the company, minus its liabilities.
This development, setting the stage for revival of the erstwhile blue chip mining equipment company, comes close on the heels of the takeover of two ailing public sector companies Burn Standard and Braithwaite by the Railways on Thursday. The bid amount for MAMC is around Rs. 100 crore. Three other companies were also in the fray.
DVC Chairman Subrata Biswas confirmed to The Hinduthat the consortium had indeed emerged the highest bidder.
In the IPO-mode now, Coal India Chairman Partha Bhattcharyya, who is now outside the country, also confirmed the development.
Closed since 2001, the employees of MAMC have been separated through a ‘ golden handshake' scheme after the BIFR-listed company's revival plans fell through.
A winding up was recommended and MAMC went to a liquidator appointed by the Calcutta High Court. Friday's auction was held by the liquidator.
CIL started taking interest to revive the company since it would get a captive source for meeting its equipment requirement, especially those for its underground mines most of which are now imported.
BEML joined the venture out of its keenness to set up a production base in the coal-mining hub of India. The multi-utility DVC which is into power generation in a big way, too joined the fray as it wanted a base for sourcing its requirements of power plant equipment like coal and ash handling equipment.
A couple of years ago, the three companies signed a pact for forming a joint venture for developing MAMC. This is expected to happen now.
The takeover will only be of the movable assets of the company, namely, the factory which stands on 193 acres and the equipment which has stood the vestige of time for eight years and is still in good condition a due diligence had revealed according to sources.
“Nearly 70 per cent of the machinery is in working condition and such machinery of Russian and German-make have long-life,” a source said.