Financial Daily from THE HINDU group of publications
Tuesday, Jan 29, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jan 29, 2002 |
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Industry & Economy
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Disinvestment Price bids for Jessop likely next month Indrani Dutta
KOLKATA, Jan. 28 EVEN as the employees have launched an agitation to stall the privatisation of Jessop, the Centre has decided to ask for the price bids by next month. The process of handing over the company is expected to be completed within the first half of 2002. The process of preparation of the documents is on, and the Government proposes to go to the BIFR after selecting a private sector partner for the company in which the 74 per cent of Government stake will be divested. ``The Centre decided to rework the shareholders' agreement to incorporate some new clauses in light of the experience gained in the divestment of Balco, Modern Foods and CMC,'' sources said. Four companies are in the race for taking over this nearly 100-year old company, which is engaged in the manufacture of a host of heavy engineering equipment, besides wagons and coaches for the Railways, the sources said. The companies that have shown interest include three city-based outfits — Titagarh Industries, Srei International Finance and Hindustan Development Corporation. Financial capability has been kept the sole criteria for acquiring the company. Ashok Leyland too, had evinced interest, however, it had to exit in light of the ongoing investigations against the group in the Bofors case. The sources said after the BIFR-approved revival package failed, Jessops was referred to the Department of Disinvestment in April 2001. While the Interministerial Group on Jessops is yet to be formed, a modified revival scheme is being prepared and submitted to the Department of Heavy Industries (which is Jessop's parent Ministry). Jessops, which has now improved its bottomline primarily on the strength of reduced manpower, witnessed a positive gross margin in the first eight months of fiscal 2002. But the management's efforts to further curtail workforce by 500 fell through as the unions opposed the scheme that opened on December 7, 2001. ``We closed the scheme a fortnight later without a single application,'' a source said. From April to November 2001, wagon production stood at 320 four-wheeler units and 18 EMU coaches, was 18. The gross value of these coaches were Rs 18.2 crore. In this period, Jessop's gross production stood at Rs 40.34 crore, which was 41 per cent in excess of the target. Its gross margin stood at Rs 1.54 crore.
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