BEML to list land holding company, clearing way for privatisation

Defence PSU's board will meet on August 18 to finalise a proposal for share allotment

BEML will soon list its land holding company on the exchanges after receiving the corporate ministry’s approval, helping efforts for the privatisation of the defence public sector undertaking (PSU).

Hiving off BEML's non-core assets into the land holding company required approval from the West Bengal and Karnataka governments. All approvals were received on August 2, an official said.

The PSU’s board will meet on August 18 to finalise the proposal of issuing one share of the land holding company for every single BEML share owned. BEML Land Assets Ltd will hold about 531 acres of land and 36,587 sq ft of residential and commercial properties, according to the PSU’s disclosures.

The central government in January 2021 invited bids for selling its 26 per cent stake in BEML, along with the transfer of management control. It owns 54.03 per cent in BEML. Multiple expressions of interest (EoI) were received to buy the government’s stake. The privatisation was delayed as demerging of assets required several approvals and ran into Covid-19 and the impact of the Russia-Ukraine war on markets.

Interested buyers would now have clarity over the operational assets that would be transferred along with the company, said the official quoted above. Financial bids would soon be invited to sell the government's stake.

For demerging the PSU’s surplus land and non-core assets, BEML Land Assets was incorporated on July 15, 2021 as a wholly owned subsidiary. The scheme of arrangement for the demerger of identified assets to the land holding company has been cleared by stock exchanges, shareholders and creditors.

BEML Land Assets has an authorised capital of Rs 10 lakh and paid-up share capital of Rs 1 lakh. The board of BEML and BEML Land Assets would decide the eligible shareholders who get shares in 1:1 ratio.

The directors on the board of BEML Land Assets include Amit Banerjee, chairman and managing director of BEML; Ajit Kumar Srivastav, director of BEML’s defence business; and Shanmukh Muchinamane Lingappa, an independent director at BEML’s subsidiary Vignyan Industries.