Financial Daily from THE HINDU group of publications
Wednesday, Nov 13, 2002
Industry & Economy
BBJ sell-off: Staff co-op gets feelers from engg cos
KOLKATA, Nov. 12
EVEN as the three companies shortlisted for the purpose of divestment of Braithwaite Burn and Jessop Construction Company Ltd (BBJ) complete their due diligence, the employees co-operative society - which is also in the running - has begun to receive feelers from some engineering companies for a possible tie-up.
Sources said that Ernst & Young, which was appointed as consultants to the Union Heavy Industry Ministry for the purpose of this divestment, has also submitted its report.
BBJ, which is associated with nearly every rail bridge in the country and some spectacular road bridges, too, has been listed for divestment.
BBJ had erected the superstructure of the second Hooghly Bridge, which along with the Victoria Memorial has come to be regarded as one of the landmarks of the city.
Sources said that indications were that in the current scenario, the BBJ Employees' Co-operative Society was among the favourites given the general mood of opposition to divestment of PSUs.
However, the fact that the society lacks a corporate structure is proving to be a stumbling block.
"Ernst & Young had posed this question to the Society members during their study," sources said.
The 40-strong executive workforce of BBJ (which has on its rolls only some 100-odd employees) is however unfazed by this lacuna in its structure, confident that it will be able to provide a corporate garb to its office-bearers once matters attain finality.
Referring to the `feelers' received from some engineering companies, sources divulged that although some of these companies were among the 18 companies pre-qualified for a possible takeover, they had not shown interest thereafter, leaving the field open to two construction companies, and a wagon manufacturer.
Much more than the issue of a corporate structure, what is proving to be source of a niggling worry to the Employees Co-operative is the fact that they might not have the financial muscle to acquire the company.
The Government proposes to divest 74 per cent of the Rs 1.97 crore equity of the company and is willing to shed its entire stake if a suitable bidder is found.
Talks have been held with a State co-operative bank but workers are insisting on a negotiated price rather than the company going to the highest bidder.
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