Armed with revival packages for HMT Ltd and Andrew Yule and Company Ltd,the government is considering plans to divest stake in the two firms. The move is aimed at helping two of the countrys oldest PSUs to comply with market regulator Sebis minimum public float norms.
The revival packages will help wipe off losses of the two firms and help in selling stake in the firms, said a senior government official.
While Andrew Yule has a public float of 6.7 per cent,Bangalore-based HMT has an even lower public float of 1.12 per cent.
Under Sebi norms issued in 2010,all listed private firms are expected to have a minimum float of 25 per cent by June 2013,while PSUs have to have a minimum listing of 10 per cent by August 2013.
We are still examining the proposal. The objective is not to generate revenue but to ensure that they have 10 per cent public float, he said.
The Cabinet Committee on Economic Affairs had last month approved revival packages for the two PSUs. While watch and tractor maker HMT,which has been in the red for the last five years was given a revival package of 1,083 crore,Kolkata-based Andrew Yule package includes conversion of Rs 41.52 crore loan into equity,and waiver of interest of Rs 33.43 crore.
Though Andrew Yule,which has interests in tea,electricals,engineering,lubricants,printing and digital communication was referred to the Board for Reconstruction of Public Sector Enterprises in 2006 and started making a profit in 2007-08,it was unable to wipe off its accumulated losses.
At current market prices,a 3.3 per cent stake sale in Andrew Yule will raise about Rs 14 crore while a 9 per cent stake sale in HMT would raise Rs 199 crore. On Thursday,scrip of Andrew Yule closed at Rs 13.02 apiece on the BSE while HMT shares closed at Rs 29.85 apiece.