Petro ministry may divest 49% govt holding in Biecco Lawrie
The ministry of petroleum is considering to disinvest 49% government’s equity in the public sector Biecco Lawrie (erstwhile British India Electric Construction Co) as an option to revitalise it.
By Rajeev Jayaswal, TNN |
NEW DELHI: The ministry of petroleum is considering to disinvest 49% government’s equity in the public sector Biecco Lawrie (erstwhile British India Electric Construction Co) as an option to revitalise it.
The PSU, which has been making profit in the last two years, still has a negative net worth due to accumulated losses. “It is not that disinvestment is the only option to restructure and modernise the company. The government is considering two models to revive PSU. One of the options is to modernise the company by bringing down government’s holding to 51%,” a source said.
Currently, the government holds 99.22% of company’s equity and balance 0.78% is held by others including Balmer Lawrie and financial institutions. Government’s holding in the company includes Oil Industry Development Board’s (OIDB) shareholding of 42%. The dilution of government’s equity would either through an initial public offering (IPO) or by inducting a strategic partner.
Another option is to restructure the equity pattern of Biecco Lawrie so that it would be able to expand its activities. According to the second option, the government may consider converting Rs 33 crore OIDB loan into equity and the accumulated unpaid interest of about Rs 5 crore be waived. The exercise would make OIDB the majority shareholder with a holding of about 68%.
This would not alter government’s holding in the company as OIDB is a government body. It is understood that both the models have been discussed at a recent meeting of OIDB, where representatives of the finance ministry were also present. The proposal has been sent to Board for Reconstruction of Public Sector Enterprises (BRPSE) for its recommendation, sources said.
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Biecco Lawrie, located in Kolkata, was one of the British companies during pre-independence era. It was mainly involved in manufacturing of electrical equipment. In 1932, the company commenced production of ‘BIECCO’ fans, a low priced fan meant for masses. It has a lube oil blending plant with 12,000 KL/annum capacity. It also undertakes marketing of kerosene, paraffin wax, bitumen and furnace oil.Start a SIP with as low as ₹500 with ET Money App!
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