New Delhi, June 16
THE Government has approved the financial restructuring package for state-owned Braithwaite Burn and Jessop (BBJ) Construction Company. The package, which was earlier cleared by the Board for Reconstruction of Public Sector Enterprises, got the Cabinet Committee on Economic Affairs' approval on Thursday.
"The package involves the conversion of loan and interest into equity and zero coupon debentures," the Union Finance Minister, Mr P. Chidambaram, said after the CCEA meeting. He said the actual cash impact would be in the form of waiver of interest and penal interest worth Rs 30.73 crore. No interest would be levied on the company beyond the cut-off date of March 31, 2004.
BBJ Construction is the second PSU restructuring case forwarded by the Board that has got the Cabinet's nod, the first one being the Hindustan Salts. As part of the restructuring package, the Government will also convert a loan of Rs 3.88 crore and the Rs 10-crore interest outstanding on the loan into equity. Part of the interest totalling Rs 10 crore will be converted into zero rate debentures.
The financial restructuring will clean up the balance-sheet of the company and make its net worth positive. This will improve its creditworthiness and enable it to borrow funds from banks and financial institutions. BBJ, which recorded revenues of Rs 38 crore in 2004-05, has plans to diversify. It has already acquired the technology for cable-supported long span road bridges and has diversified into marine-related activities.
CCEA also decided to extend budgetary support of Rs 141.41 crore to 16 Central PSUs to enable them to pay pending salaries and statutory dues of their employees. The support to PSUs would clear off the salaries and statutory dues they owe to their employees till March 31, 2005, Mr Chidambaram said.
All the 16 PSUs fall under the Ministry of Heavy Industries and owe Rs 98.43 crore as salaries and Rs 42.98 crore as statutory dues.
Thursday's decision covers the period from August 2004 to March 2005 and benefits employees of Andrew Yule, Hindustan Cables, Bharat Heavy Plates and Vessels and HMT Watches, among others. While Hindustan Cables owes Rs 63.32 crore to its employees, dues of HMT (Watches) to its employees amount to Rs 22.11 crore and Bharat Heavy Plates and Vessels has to pay Rs 16.25 crore to its staff.