RIL could revitalise dying HP PSU
The Reliance group of industries has evinced interest in entering into a partnership with Himachal Pradesh's HPMC.india Updated: Apr 14, 2006 11:24 IST
The Reliance group of industries has evinced interest in entering into a partnership with Himachal Pradesh's HPMC, a move that could revitalise the loss-making state-run fruit and marketing company.
This development comes barely days after federal Minister of State for Commerce Jairam Ramesh asked the state government to partly privatise the HP Horticultural Produce, Marketing & Processing Corporation (HPMC) to save it from further losses.
"Mukesh Ambani's Reliance group is keen to enter into a partnership with HPMC in fruit processing, cold storage, contract farming and transportation of its goods," state Horticulture Minister Singhi Ram said.
"Not only would Reliance provide finances to this state-run company but it would also help in the upgrading and modernisation of its cold stores, fruit processing units and other marketing infrastructure, both within and outside the state," he said.
HPMC has shopping outlets, cold stores, fruit processing units and other infrastructure in Himachal Pradesh and in all four metropolitan cities.
"Taking advantage of the well known brand name of HPMC, Reliance will take its fruit products, including juices, jams, cider, wine, chutneys, to consumers in markets across the country and even overseas," the minister said.
"Top officials of Reliance will be soon making a detailed presentation to the state government."
The equity participation between the two parties is expected to be on a 51:49 basis, but it remains to be seen who will get the majority share.
Without referring to any particular private company, Minister Ramesh said the private party involved should get the majority equity share as management control would make it keen to enter into a deal.
Once a well-known brand of the hill state, the 35-year-old HPMC has been a sick unit for many years. Officials say its accumulated losses have touched Rs 279.53 million. Its turnover is Rs 429.9 million, a quarter of which goes into the salaries of the overstaffed company.
If the deal doesn't work out, the state government may consider going in for global tenders, officials said.