Last year, the government made serious efforts to sell its entire stake in the company, but failed to get any suitable buyers.
Scooters India, the government-owned firm known for making the iconic Lambretta scooters, is likely to shut down very soon as the two-wheeler maker continues to report losses since 2016-17. The company’s net worth is also plunging. According to sources, a proposal to be placed before the Union Cabinet in this regard is being prepared.
Last year, the government made serious efforts to sell its entire stake in the company, but failed to get any suitable buyers. To give another try, the government is planning to sell the assets of the loss-making Scooters India and shut down the company. Sources said a panel of secretaries formed to oversee the disinvestment process has approved the proposal despite an opposition from the Ministry of Heavy Industries.”
The Ministry of Heavy Industries has been tasked with finalising the proposal for the Cabinet Committee on Economic Affairs’ (CCEA) final approval. Once the cabinet gives a go-ahead to the proposal, the ministry will initiate the process of winding up the company. Another source said that “after the introduction of BS-VI norms, it is very difficult for the company to revamp it’s production line”.
As per the proposed plan, a major chunk of the company’s land, approximately 147 acres, will be sold to the Uttar Pradesh government at a fair price while its manufacturing plant and machinery may be put up for auction.
The Scooters India brand name may be sold separately as it has famous brands such as Lambretta, Vijai Super, Vikram and Lambro. Currently, the company produces several types of three-wheelers under the Vikram brand. Government agency MSTC is likely to be roped in for auction of the assets. The receipt from the sale will be used towards the payment of its employees. Presently, the company has around 100 employees. They may be offered a separation scheme.
Scooters India has a market capitalisation of Rs 265 crore and the stock trades flat at Rs 30. Its 52-week high was Rs 50.55 and the yearly low was Rs 14.25.
First Published on Aug 18, 2020 10:47 pm