The government's stake sale in loss making three-wheeler maker Scooters India Ltd (SIL) is likely to be completed within this fiscal and the process will be kicked off with the seeking of approval of Parliament in the upcoming monsoon session.
"The divestment process of SIL is expected to be completed within this fiscal itself," a senior government official said on the condition of anonymity. Last week the Cabinet had approved divestment of the government's entire 95.38 per cent stake in SIL, which has been suffering losses since 2002-03 and its entire networth completely eroded by 2008-09.
In March, 2009 the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises (BRPSE). As on 2009-10, it had a net loss of Rs 22.03 crore. A resolution to sell the 95.38 per cent stake will be introduced in the monsoon session of Parliament, the official said.
The monsoon session of Parliament is likely to commence in July. "Once the approval is given, invitation of bids and due diligence processes will kick off and the process could be completed within six months," the official said, adding, the valuation of the company could be known only after that.
After the government completely sells its stake, the balance equity of about 5 per cent will remain with banks, financial institutions, corporate bodies and others. While Rajkot-based Atul Auto and Mahindra & Mahindra have expressed their interest in acquiring SIL, it is understood that no new players have come forward as prospective buyers.
The government, however, is hoping that some foreign players may show interest as the auto sector comes under automatic 100 per cent foreign direct investment. "We really want a big player to come and revive the company," the official said. Incorporated in 1972, SIL started commercial production of scooters under the brand name of Vijai Super for domestic market and Lambretta for overseas market. Later it ventured into three-wheelers with the Vikram brand. However, in 1997 the firm stopped two-wheeler production and has since been into manufacturing and marketing of 3-wheelers only.