Financial support for potentially viable units

Our Bureau

"PSUs could make a turnaround by professionalising the board and the management, autonomous functioning and close monitoring by the proposed core committee and RIAB.''

Thiruvananthapuram, Aug. 31

The Kerala Government has reached an understanding with banks on restructuring the public sector undertakings in the State.

Consequently, a "Core committee for PSU restructuring'' will be constituted, comprising representatives of the banks and Government officials. This was decided at a meeting here between the Government and various leading public and private sector banks in the State.

The Principal Secretary (Industries and Commerce), Mr T. Balakrishnan, will be the Chairman of the committee, while Mr K. Padmakumar, Secretary, Restructuring and Internal Audit Board (RIAB), will be the Convener.

This apart, PSU-specific committee will also be formed to interact with the core committee for finalising the restructuring plans.

At the meeting, the Industries Minister, Mr Elamaram Kareem, said that the Government was committed to the restructuring and reviving of PSUs through upgradation of technology, performance contract, inter-PSU tie-ups, capacity building, and efficient corporate governance.

He said the PSUs could make a turnaround by professionalising the board and the management, autonomous functioning and close monitoring by the proposed core committee and RIAB.

The Finance Minister, Dr Thomas Isaac, who was also present at the meeting, assured that the Government would extend financial support for restructuring potentially viable PSUs. It was observed at the meeting that many PSUs had availed themselves of term loans as well as working capital from banks and other financial institutions, but failed to service them promptly. This had resulted in non-performing assets for the banks.

(This article was published in the Business Line print edition dated September 1, 2006)
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