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Govt to put Scooters India on the block
Published on 19 May. 2011 11:30 PM IST
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The government Thursday said it will sell its entire 95% stake in loss-making two- and three-wheeler manufacturer Scooters India Ltd, maker of the iconic Lambretta scooters.
The disinvestment proposal was approved at a cabinet meeting chaired by Prime Minister Manmohan Singh.
“It is proposed to revive the company through induction of a strategic partner by offloading the entire government equity of around 95%. The balance 5% equity will remain with banks, financial institutions, corporate bodies and others,” said an official statement.
Known for manufacturing the Lambretta scooters, popular in late 1970s and 1980s, Scooters India Ltd is a Lucknow-based automobile firm that designs, develops, produces and sells a range of three-wheelers under the Vikram brand. The company was facing financial difficulties and the disinvestment proposal was forwarded to the cabinet by Heavy Industries and Public Enterprises Minister Praful Patel.
The government said the divestment would “arrest further drain of public money and also ensure economic growth of the company and its employees.” It would also continue to pay the salary of the company’s employees and clean up the balance sheet of the firm by the time the new owners are identified.
Scooters India, has been recording operational losses since 2002-03 and net losses since 2006-07 mainly on account of its inherent inefficiency and low productivity as compared to other players in a highly competitive three-wheeler market. It is not even able to meet the liabilities for the salaries and statutory dues of its employees, which are being provided by government as non-plan loans.
In 2008-09, its net worth was fully eroded and the company was termed sick as per guidelines of the Board for Reconstruction of Public Sector Enterprises (BRPSE) guidelines and the Sick Industrial Company Act.

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