The cabinet committee on economic affairs (CCEA) today cleared the HMT revival package which involves a cash infusion of Rs 723 crore. Apart from others, the cash infusion would be utilised to fund the company's VRS scheme and after the clean up of the balance sheet, the revival package entails the company entering into a joint venture for future business operations.Of the total amount being pumped in by the government in HMT, Rs 443 crore (63 per cent) will be in the form of preferential share capital, Rs 180 crore (24.9 per cent) by way of equity capital and the balance Rs 100 crore (13.8 per cent) for special non-plan loan for the VRS scheme at 3.5 per cent yearly interest.Of the Rs 180 crore, as per the CCEA decision, Rs 90 crore would be towards capital expenditure while Rs 80 crore would be towards technological acquisition and upgradation. This amount would however be spread over four years amounting to Rs 20 crore being spent each year.Briefing reporters after the meet, finance minister P Chidambaram said that “with the restructuring of the company, its balance sheet including the debt equity ratio will improve”.
