Government clears winding up of SUUTI; creates NAMC

NEW DELHI: The government approved winding up of Specified Undertaking of the Unit Trust of India ( SUUTI) and creation of National Asset Management Company ( NAMC).

The Cabinet Committee on Economic Affairs ( CCEA) has cleared proposal for winding up of SUUTI, sources said.

The CCEA has also decided to create another fund called National Asset Management Company (NAMC) to buy government stakes in some PSUs.

It is to be noted that SUUTI was formed by the restructuring of the erstwhile Unit Trust of India (UTI). It came into being in February, 2003.

As per the proposal, the government will first transfer its stakes in L&T, ITC and Axis Bank - held through SUUTI - to NAMC.

The AMC will then take loan from banks to buy government stakes in the public sector companies, sources said.

SUUTI holds 11.54 per cent in ITC, 23.6 per cent in Axis Bank and 8.3 per cent in L&T. These stakes are valued at around Rs 32,000 crore.

The new entity would help government furthering its disinvestment objective.

The government is targetting Rs 30,000 crore from stake sales in public sector undertakings in 2012-13, even as it missed the target for the current fiscal by a wide margin.

In 2011-12, as against a target of Rs 40,000 crore, the government will raise about Rs 14,000 crore from disinvestment.