Ailing Scooters India (SIL) is looking to reduce its net loss to Rs 17.9 crore in FY12 from Rs 18.4 crore in the last fiscal, on the back of reduced operational cost and increased production.
According to the Memorandum of Understanding (MoU) for 2011-12 between the company and the Ministry of Heavy Industries and Public Enterprises, the company has pegged the production to increase by 10% and reduction in operational cost by 5%.
The MoU, which was tabled in Parliament today, said the company is likely to register an increase in its gross sales to Rs 223.2 crore in this fiscal from Rs 171.2 crore in the last year.
In May this year, the government decided to divest its entire 95% in the firm, which primarily manufactures three-wheelers, with an aim to revive the company that has been incurring losses since 2002-03.
The balance 5% equity will remain with banks, financial institutions, corporate bodies and others.
The government will seek approval of Parliament to get the authority to identify and induct a strategic partner. Besides, the Cabinet also gave approval for continued extension of salary support and clearing of balance sheet.
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In March 2009, the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises (BRPSE). As on 2009-10 it had a net loss of Rs 22 crore.
Incorporated in 1972, SIL started commercial production of scooters under the brand name of Vijai Super for domestic market and Lambretta for overseas market.
Later, it ventured into three-wheelers with the Vikram brand. However, in 1997 the firm stopped two-wheeler production and has been into manufacturing and marketing of three-wheelers only.
The government, which holds 95.38% as on 31 December last year, was considering a joint venture with the private sector or disinvestment of its stake for revival of SIL.
After a recommendation by the BRPSE to revive Scooters India through disinvestment or joint venture, private firms such as Atul Auto, Bajaj Auto, Mahindra & Mahindra and Piaggio are being looked as possible suitors.