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The entire Government stake of over 95 per cent in Scooters India is to be sold by inviting bids from interested parties. The decision to sell the stake was taken by the Cabinet at its meeting here on Thursday.
Financial institutions and public hold the balance stake (4.62 per cent).
“It is proposed to revive the company through induction of a strategic partner by offloading the entire Government equity ...,” said an official statement. It added that the Government will retire the remaining debt of SIL – reportedly at around Rs 100 crore, while extending salary support to its employees till a new partner is identified/selected. The company's shares on the BSE rose 4.92 per cent to Rs 38.40.
Mahindra and Mahindra and Gujarat-based Atul Auto are among the possible suitors. Bajaj Auto, however, said it was not in the race.
Atul Auto keen
“We are very interested. Both companies make front-engine three-wheelers… there lies the synergy. They have a captive market in Uttar Pradesh and around 40-50 dealers, which we can use for our products as well. However, we will have to invest in upgrading the machinery,” said Mr Vijay Kedia, Director, Atul Auto.
Mahindra is to examine the opportunity and decide whether to approach the Government. “We will look to give any update in about 45 days,” a company spokesperson said.
A top Piaggio official said, “We are yet to evaluate the company's assets and have not taken any decision.”
Last year, the Government was deliberating a 74 per cent stake sale, but decided on a complete exit because it felt that a new private owner would be more interested if it could get complete control.
Losses
Scooters India has about 150 acres and makes three-wheelers under the Vikram brand. It has been recording operational losses since 2002-03 and net losses since 2006-07. In 2008-09, its net worth was fully eroded and by the end of 2009-10, accumulated net losses had touched around Rs 800 crore.
Asked whether the decision on Scooters India meant that the UPA Government was changing its disinvestment policy on PSEs, Ms Ambika Soni, Information and Broadcasting Minister, replied in the negative. The UPA Government had previously said it would retain a majority shareholding of at least 51 per cent.
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