Option of transferring controlling stake on cards

Anil Sasi

Lending expertise

BHEL involved in

the revival of Bharat Heavy Plates and Vessels and Bharat Pumps and Compressors Ltd.

ONGC being

roped in for turning around Tide Water Oil (India) Ltd.

New Delhi, Oct. 7

Having failed to make much headway in its efforts to disinvest loss-making Central Public Sector Undertakings (PSUs), the Centre is now working with the revised strategy to turn around bleeding firms by handing over their management to blue-chip `Navaratna' enterprises, with the option of transferring controlling stake also on the cards.

The state-owned equipment major Bharat Heavy Electricals Ltd (BHEL) is being involved in the revival of two PSUs Bharat Heavy Plates and Vessels (BHPV) and Bharat Pumps and Compressors Ltd. Oil and Natural Gas Corporation (ONGC) is also being roped in for turning around Andrew Yule-subsidiary Tide Water Oil (India) Ltd.

"The Government has decided to tap into the BHEL management pool for reviving the units... One of our General Managers has taken over as the Managing Director of Bharat Pumps and a turnaround is already visible, with the unit generating a surplus in current operations," BHEL's Chairman and Managing Director, Mr Ashok K. Puri, told

Business Line.

In the case of Andhra Pradesh-based Bharat Heavy Plates and Compressors too, he said BHEL was getting involved in the revival of the firm. He also said the equity and stake option in these firms was also under consideration, though the details were still being firmed up.

Support for plan

According to Government sources, the plan also got the nod of the Board for Reconstruction of Public Sector Enterprises and the possibility of a takeover by a robust state-owned enterprise such as BHEL has strong support from the workers' unions as well.

Also, the units are not necessarily being chosen to complement the business portfolio of the `Navaratna' but, rather, the move is prompted by the intention to utilise the management expertise, officials said.

In the case of Bharat Heavy Plates and Vessels, an engineering projects construction company, besides BHEL, Engineers India Ltd (EIL) is also being involved in the management turnaround process, Government sources said.

In the case of the Allahabad-based Bharat Pumps and Compressors Ltd, a role is also being assigned for both ONGC and EIL.

The model to involve `Navratnas' in the revival of sick units is also being tried out in the case of other Central enterprises as well, with a takeover of lubricant company Tide Water Oil by ONGC slated to be in advanced stages. ONGC had earlier this year completed the due diligence for this purpose. Tide Water Oil's takeover by ONGC is part of the overall package for the revival of Andrew Yule.

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(This article was published in the Business Line print edition dated October 8, 2006)
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