NEW DELHI: The heavy industries ministry is in the process of identifying sick state-run companies that it believes are terminally ill and can be sold off.

There are about 15 companies on the ministry’s radar, including HMT Bearings, Tyre Corporation of India, Tungabhadra Steel, Richardson & Cruddas, Hooghly Dock & Port Engineers and CITW.
Earlier, the Board for Restructuring of Public Sector Enterprises (BRPSE) had recommended revival of seven companies through joint venture or disinvestment.

The government has already decided to appoint valuers for its 29.54 per cent stake in Hindustan Zinc, sending a signal that it is not averse to exiting assets. According to senior officials, the ministry of heavy industries and public enterprises has pitched for greater powers for BRPSE.

“There is a case made for reorganistaion of BRPSE and giving it more powers, so that the recommendations are accepted within a time frame,” said the heavy industries ministry official quoted earlier, adding that the observations were part of the presentations made to the Cabinet secretary and the minister.

The ministry will also seek to fast track the implementation of the revival package and in cases where such stimulus has failed, it will press for the companies to be sold off.

“There will be two sets of companies, one which is terminally ill and the second which has failed after revival,” said the official, adding that companies which are generating income through non-operating profits will be dealt with at a later stage.

Around 50 central public sector enterprises (CPSEs) have been making continuous losses for the past three fiscals. These include Air India, BSNL, MTNL and ITI.

“As of now, strategic sale is a long-winding procedure, which involves BIFR and, under the new Companies Act, National Company Law Tribunal (NCLT). We want that once BRPSE has recommended a stance, within an acceptable time frame that decision be implemented,” said another official aware of the deliberations.

Sick state-run companies may also be kept out of the purview of NCLT so as to expedite the process of their winding up.

So far, the government has approved revival of 44 CPSEs envisaging a total assistance of Rs 28,333.10 crore.

Experts are not too optimistic of the government being able to sell sick PSUs.

“Any strategic sale pursued with all due diligence may still court controversy and would be a tedious process,” said Jagannadham Thunuguntla, strategist and head of research at SMC Global Securities.

The UPA government, in its interim budget for 2014-15, had budgeted Rs 36,925 crore from disinvestment and an additional Rs 15,000 crore through sale of its residual stake in private companies.