HMT Bearings on divestment track
After initiating divestment of the government stake in Andrew Yule and Cement Corporation of India (CCI), the ministry of heavy industries may now put HMT Bearings on the disinvestment track.
By Dheeraj Tiwari, ET Bureau |
NEW DELHI: After initiating divestment of the government stake in Andrew Yule and Cement Corporation of India (CCI), the ministry of heavy industries may now put HMT Bearings on the disinvestment track. The ministry also has similar plans for Hindustan Photofilms, and the matter is currently pending with the Board for Reconstruction of Public Enterprises (BRPSE).
���We plan to divest around 74% stake in HMT Bearings. We have invited expressions of interest (EoI) from various players. The selected partner will have the full management control. We may also sign a joint venture agreement in the same regard. The whole process should be completed within a span of 4-5 months,��� a senior government official said.
Based in Hyderabad, HMT (B) was incorporated in 1964 under the name of Indo Nippon Precision Bearings. It became a subsidiary of the HMT Group in 1980. The company is an OEM to many automobile giants like Escorts, Eicher, M&M, Punjab Tractors, Ashok Leyland and Telco. The company���s performance, however, dipped in the past few years and it posted a loss of Rs 7 crore last financial year.
���We had requested the finance ministry for a loan to resurrect the company (HMT Bearings). At that time it needed around Rs 20 crore. The proposal, however, didn���t work out because the ministry was of the view that the interest rate at which the loan was offered was on the higher side,��� the official said.
The government now feels that the company can be only revived by private partners who will bring in new technology and enhance the product range. The ministry of heavy industries has approved the 57.17% stake sale in Dishergarh Power Supply Corporation (DSPSC), owned by Andrew Yule & Company. It also plans to sell its stake in another subsidiary ��� Tide Water Oil which makes auto lubricants such as Veedol. Earlier, the ministry had approved the sale of six units of CCI which is expected to fetch around Rs 800 crore.
���We plan to divest around 74% stake in HMT Bearings. We have invited expressions of interest (EoI) from various players. The selected partner will have the full management control. We may also sign a joint venture agreement in the same regard. The whole process should be completed within a span of 4-5 months,��� a senior government official said.
Based in Hyderabad, HMT (B) was incorporated in 1964 under the name of Indo Nippon Precision Bearings. It became a subsidiary of the HMT Group in 1980. The company is an OEM to many automobile giants like Escorts, Eicher, M&M, Punjab Tractors, Ashok Leyland and Telco. The company���s performance, however, dipped in the past few years and it posted a loss of Rs 7 crore last financial year.
���We had requested the finance ministry for a loan to resurrect the company (HMT Bearings). At that time it needed around Rs 20 crore. The proposal, however, didn���t work out because the ministry was of the view that the interest rate at which the loan was offered was on the higher side,��� the official said.
The government now feels that the company can be only revived by private partners who will bring in new technology and enhance the product range. The ministry of heavy industries has approved the 57.17% stake sale in Dishergarh Power Supply Corporation (DSPSC), owned by Andrew Yule & Company. It also plans to sell its stake in another subsidiary ��� Tide Water Oil which makes auto lubricants such as Veedol. Earlier, the ministry had approved the sale of six units of CCI which is expected to fetch around Rs 800 crore.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
