NEW DELHI: Unable to find a potential buyer for the sick PSU Scooters India Ltd (SIL), the Department of Heavy Industry has taken a U-turn on divesting stake in the company and now plans to seek PMO's approval to revive it.
"The department has decided to reverse the order to disinvest the government's stake in Scooters India, since there are not many buyers for it," an official source said.
The Department of Heavy Industry (DHI) will soon send a proposal to reverse the decision to the Prime Minister Office (PMO), the source added.
After getting clearance from the PMO, DHI will ask the Board for Reconstruction of Public Sector Enterprises (BRPSE) to work out a revival process, the source said.
"The department is looking at reviving the company through financial inclusion," the source said.
Recently, Minister of Heavy Industries and Public Enterprises Praful Patel had said: "We have taken the decision to put disinvestment of SIL on hold and will look at it holistically before we take a final decision".
In May this year, the Cabinet had approved selling of the government's entire 95.38 per cent stake in SIL to private players.
After reacting positively to the decision, private players such as Mahindra & Mahindra and Piaggio later pulled out from the race.
In the wake of the Uttar Pradesh elections in February, Congress leaders in the state were understood to have sought postponement of the SIL sale. The state Congress leaders do not want it to be an election issue.
The company - which has about 1,200 regular employees - has been incurring losses since 2002-03. In March 2009, the company was declared sick.
Incorporated in 1972, SIL initially manufactured scooters under the brand name Vijai Super for the domestic market and Lambretta for overseas markets.
Later, it ventured into the three-wheeler segment with the Vikram brand. In 1997, it stopped two-wheeler production and is now engaged in the manufacture and marketing of only three-wheelers.
SIL's net loss was Rs 18.4 crore during 2010-11. Shares of Scooters India were up 1.6 per cent, trading at Rs 31.5 a piece on the BSE in the late afternoon today.
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