Govt may dissolve SUUTI

The move is expected to fetch the government enough money for meeting its disinvestment target of Rs 40,000 crore in 2011-12. So far the government has raised only Rs 1,145 crore through sale of its equity in Power Finance Corporation.

8220;We will dissolve SUUTI soon and form another company.SUUTI8217;s assets,which are worth around Rs 50,000 crore,will be transfered to that government-owned company. It will pledge SUUTI8217;s assets to raise loans and buy shares of existing PSUs.

A Cabinet note will have to be moved for the purpose,8221; said a senior Finance Ministry official.

The new company will be allowed to sell PSU shares once the stock market regains its lost vigour.

At present,SUUTI is governed by the UTI Repeal Act. After the proposed move to form a company,it will fall under the Companies Act,which will help the government better leverage its holding and provide more freedom,the official said.

Because of volatility in stock market,the government has not able to go ahead with its disinvestment programme.

The government has also been looking at the possibility of buyback under which it will be sell its stake to the concerned PSUs to raise funds.