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Tuesday, May 08, 2001

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Supply orders from DoT -- Hind Cables: Reservation likely post-divestment

Our Bureau

NEW DELHI, May 7

THE Union Government is likely to continue the existing reservation of supply orders for Hindustan Cables Ltd from the Department of Telecommunications (DoT) for at least two years after disinvestment.

``A proposal to this effect is being processed by the Government,'' official sources said.

The Government has decided to disinvest stake in Hindustan Cables Ltd through the joint venture route and the draft sale agreements have been finalised.

Extending the supply order reservation for Hindustan Cables is being planned to enable the company meet competition better in the post-disinvestment phase.

``Instead of throwing the baby out of the window one fine day, we propose to continue with the supply order reservation for two years after disinvestment so that the company can confront the transitional period better,'' the officials said.

The Government has expressed its intent to continue the purchase price preference and supply order reservation for companies lined up for disinvestment that were enjoying such benefits.

In fact, a similar decision was taken to extend the purchase price preference for two years to Hindustan Teleprinters Ltd in which the Government is selling 74 per cent stake in favour of a strategic partner.

ICICI Securities Ltd is advising the Government on divestment in Hindustan Cables and the process of selecting a joint venture partner to run the company is expected to be completed by June 30, according to the officials.

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