Union minister of state for coal and mines Ravi Shankar Prasad last week ruled out any immediate bailout package for the ailing Mineral Exploration Corporation Ltd (MECL), stating that, though the government was willing to help, merely writing-off the interest burden or infusing more capital could not be the answer.
"We are trying to create conditions for MECL to respond to changing times. The traditional view was of infusing capital when money ran short and much of the present problems in public sector undertakings are due to this adhocism," Prasad said at a meet at the MECL head-quarters. Here on a familiarisation visit after taking charge of his ministry, Prasad said a "more comprehensive view would have to be taken to see that the company turns around."
Prasad said MECL had been listed for disinvestment and, hence, a turnaround in the company's balance sheet for it to become more meaningful and relevant in the present context was imperative. MECL had climbed out of the red in 1997-98 when it made a modest profit of Rs 85 lakh after six years of consistent losses. The accumulated losses of the PSU after it went into red in 1990-91 were Rs 53.74 crore till the financial year 1997-98.
MECL has an authorised capital of Rs 100 crore and a paid-up capital of Rs 67.75 crore.
Sustaining itself on budgetary support for long, it had availed of long term loans from the Government of India of which Rs 30 crore is still outstanding. It also has an accumulated interest burden of around Rs 27 crore per annum which wipes out its profits every year.
