THE UNION Government seeks to realise about Rs 600 crore through outright sale of land spanning over 30 acres at Jangpura Extension, in heart of the capital.
The land belongs to terminally sick state-owned enterprise, Hindustan Prefab Ltd (HPL).
Since the company's networth has been completely eroded, the Centre seeks to close down operations of this company and take recourse to outright sale of HPL's assets very shortly.
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This is part of the disinvestent strategy being followed by the Vajpayee Government for terminally sick companies.
The Disinvestment Department headed by Arun Jaitley will shortly move the Cabinet Committee on Disinvestment (CCD) seeking approval for sale of the company's assets.
According to informed sources, the Department of Disinvestment has preferred outright sale of HPL properties in the capital rather than finding a strategic partner for reviving the unit.
The HPL is presently manufacturing pre-fab products like electric poles, railway sleepers, slabs and other low value-cum-low-tech items. Apart from manufacturing these items for railways and state electricity boards, HPL is also into construction activities.
Sources said that along with proposal for outright sale of properties for commercial development, the Centre would offer an attractive Voluntary Separation Scheme (VSS) for 677 employees working in the company.
The CCD's recommendation for an outright sale is in controvention to erstwhile Disinvestment Commission's proposal for finding a strategic partner.
The divestment panel had sought offloading of 74 per cent equity in favour of a joint venture partner along with management control.
The disinvestment commission, which has now been folded up after G V Ramakrishna's tenure came to an end, had asked the Government to appoint a global advisor for finding suitable strategic partner.
Even the Commission had maintained that revival, revamp or joint venture partnership at HPL would be possible only if the government approves commercialising properties of HPL.
Sources said since the pre-fab industry is heavily fragmented due to low entry barriers and existance of several companies in unorganised sector there is no point in continuing the HPL operations.
The centre's holding is 100 per cent in HPL with an equity capital of Rs 6.97 crore. The company's networth has been eroded by Rs 9.20 crore and is reporting an annual loss of Rs 5 crore.
The annual interest liability on borrowings has been estimated at Rs 2 crore.
As on March 31, 1997, the company reported accumulated losses of Rs 21 crore which piled up further.