Govt seeks to sell 95% stake in Scooters India

The department of heavy industries (DHI) is expected to issue a notice seeking expression of interest for a 95% stake sale in Scooters India Ltd in the next two months, two people familiar with the development said.

The stake-sale plan marks a change of stance by DHI, which initially wanted to retain a majority holding while handing management control over to a private partner.

Praful Patel, who took over as heavy industries minister last month, has decided against the retention of any stake.

“He thinks giving full control to private partners will re- move various hassles and help the company in the process of revival,“ said a top DHI official.

In August 2010, Mint reported that the government was looking for a partner to revive the company that made a loss of `22.03 crore in the 2009-10 fiscal year.

“We are working on various modalities involved. We will send the draft proposal for review to the cabinet and ex- pect to come out with an expression of interest,“ said an- other DHI official. Both officials requested anonymity.

The ministry is also keen on the outright sale of sick public sector unit, HMT Bearings Ltd, a third DHI official said on condition of anonymity.

The government holds 97% of the Hyderabad-based company, which reported a loss of `15.31 crore in the last financial year.

Lucknow-based Scooters India has an annual capacity of 12,000 units per year. The company used to sell two- wheeler brands such as Vijai Super and Lambretta. It dis- continued two-wheeler production in 1997 and now man- ufactures only three wheelers.

The government was approached by firms such as Mahi- ndra and Mahindra Ltd and three-wheeler maker Atul Auto Ltd for a possible stake acquisition. Gujarat-based Atul Auto director Vijay Kedia reiterated last week that the three-wheeler maker would be interested in taking a ma- jority stake in the distressed firm.