The proposal to divest the government's stake in two sick state-owned companies, Scooters India (SIL) and HMT Bearings, has been sent to Cabinet for final approval, a highly placed source has said.
The Department of Heavy Industry feels that these two sick companies need fresh capital infusion, as they are not in good financial shape.
"HMT Bearings and Scooters India are sick public sector units (PSUs), which are beyond redemption. So, the department has proposed these companies for disinvestment," said a senior official at the ministry.
The government holds a 95.38% stake in SIL and a 97% stake in HMT.
The official, however, added that the modalities of how much stake in these two units should be sold would be decided later.
SIL and HMT Bearings have been putting pressure on the government exchequer, as they have been reporting losses for the past several years, he said.
SIL posted a loss of Rs 22.03 crore in 2009-10, while HMT Bearings recorded a net loss of Rs 15.31 crore.
Located near Lucknow, SIL has an integrated automobile plant for the design, development, manufacture and marketing of conventional and non-conventional fuel-driven three-wheelers.
HMT Bearings is located in Hyderabad and is engaged in the manufacture of ball and roller bearings.
Earlier this month, Heavy Industries Minister Praful Patel said that the ailing Scooters India could be considered for complete privatisation.
"There are a lot of companies under the Ministry of Heavy Industry, like Scooters India, which need to be looked at differently... Some disinvestment, some outright sale," Patel had said.