Govt looking for JV partner for BIC
The government is planning to rope in joint venture partners for reviving textile PSU British India Corporation.
By PTI |
NEW DELHI: The government is planning to rope in joint venture partners for reviving textile PSU British India Corporation.
The Expression of Interest for BIC, which remained in red even after its nationalisation in 1981, is expected to be invited by August end from companies willing to take over the management of the ailing company, sources said.
The proposal to induct a joint venture partner for BIC revival runs contrary to the restructuring package for the company prepared by Board for Industrial and Financial Reconstruction (BIFR).
The BIFR was in favour of current management running the company with working capital and funds for voluntary retirement scheme coming from interest free government loan and sale of assets of the company.
The BIFR was in favour of revival of only two mills of the company - Cawnpore Woollen Mills at Kanpur and Dhariwal in Punjab.
Apart from grant of Rs 49 crore and interest free loan of Rs 37 crore the government was required to convert loan of Rs 249 crore into equity and forego interest on it amounting to Rs 390 crore.
Instead of running the mills, the government decided to bring in a partner.
The Expression of Interest for BIC, which remained in red even after its nationalisation in 1981, is expected to be invited by August end from companies willing to take over the management of the ailing company, sources said.
The proposal to induct a joint venture partner for BIC revival runs contrary to the restructuring package for the company prepared by Board for Industrial and Financial Reconstruction (BIFR).
The BIFR was in favour of current management running the company with working capital and funds for voluntary retirement scheme coming from interest free government loan and sale of assets of the company.
The BIFR was in favour of revival of only two mills of the company - Cawnpore Woollen Mills at Kanpur and Dhariwal in Punjab.
Apart from grant of Rs 49 crore and interest free loan of Rs 37 crore the government was required to convert loan of Rs 249 crore into equity and forego interest on it amounting to Rs 390 crore.
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Instead of running the mills, the government decided to bring in a partner.
While the government's equity in the joint venture will be in the form of plant and machinery of the BIC mills, the joint venture partner would be asked to run the company using its own resources.
"The mills will be given to the joint venture partner on a lease for 15 years," sources said.
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