High level panel for clearing PSU's overseas asset buy

NEW DELHI: The government may set up a high level panel that will clear overseas asset acquisition by state owned companies without going to the cabinet.

"We expect the Cabinet to pass the proposal next month or so and then a month after that the panel will be set up," Department of Public Enterprises ( DPE) Secretary Bhaskar Chatterjee said at an AIMA PSU Summit.

At present, a PSU board can take the decision to go for a merger and acquisition activity but it has to inform the cabinet committee on economic affairs ( CCEA) for any investment abroad.

As of now, a maharatna company can invest 15% of its networth in a single project for establishing a new venture or undertaking an acquisition activity with a cap of Rs 5,000 crore. The overall ceiling in investments of all projects should not exceed 30% of the net worth of the PSU. In case of navratna companies, the maximum investment cap is Rs 1,000 crore.

The empowered committee headed by Ajit Kumar Seth will clear the PSUs' projects for the acquisition of strategic assets abroad. The secretaries of the administrative ministry (in charge) of the PSUs, its Chairman and Managing Director and representatives of the ministries of external affairs and finance would be in the empowered committee, said Chatterjee.