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Disinvestment proposal for Scooters India lying in cabinet

Disinvestment proposal for Scooters India lying in cabinet
PTI
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First Published: Tue, May 10 2011. 05 23 PM IST
Updated: Tue, May 10 2011. 05 23 PM IST
New Delhi: The heavy industries ministry Tuesday said it has sent a proposal to the Cabinet regarding disinvestment of the government’s stake in the loss making auto maker Scooters India.
“There is an old proposal that we had forwarded to the Cabinet. Now its up to them to decide,” heavy industries and public enterprises minister Praful Patel told reporters here.
Located near Lucknow, Scooters India Ltd (SIL) is an integrated automobile firm, engaged in designing, developing, producing and selling a range of conventional and non-conventional fuel driven 3-wheelers.
It also used to make the Lambretta scooters until it stopped production due to losses.
The company is currently facing financial difficulties with a net loss of Rs 22.03 crore in 2009-10.
The government, which holds 95.38% as on 31 December last year, was considering a joint venture with the private sector or disinvestment of its stake for revival of SIL.
In fact, favouring an outright sale, Patel had earlier said SIL could be considered for complete privatisation.
Earlier, the Board for Reconstruction of Public Sector Enterprises had recommended reviving sick PSUs like Scooters India and Nepa Ltd, through disinvestment or joint venture.
Following this, three-wheeler maker Atul Auto had said it was interested in acquiring a “not-less-than 51% stake” in Scooters India.
Apart from Atul Auto, there is speculation that other majors such as Bajaj Auto, Mahindra & Mahindra and Piaggio are also eyeing acquisition of a stake in the company.
Shares of Scooters India Tuesday closed up 4.86% at Rs 36.65 on the Bombay Stock Exchange.
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First Published: Tue, May 10 2011. 05 23 PM IST