The cabinet committee on economic affairs (CCEA) has approved the proposal for financial restructuring of Bharat Bhari Udyog Nigam Ltd (BBUNL).
Under the restructuring, the CCEA approved the transfer of administrative control of BBUNL subsidiaries Burn Standard Company Ltd (BSCL) and Braithwaite & Co Ltd to the ministry of railways and transfer of refractory unit of BSCL at Salem to Steel Authority of India Ltd (SAIL). Besides, the CCEA approved the merger of another subsidiary, Braithwaite, Burn and Jessop Construction Co Ltd and BBUNL.
This involves an expenditure of Rs1,139.16 crore as non-financial assistance by waiving a government loan and interest burden on Burn Standard Company and financial assistance of Rs14.15 crore to the Burn Standard Company, an official release said.
The financial restructuring of Burn Standard Company Ltd will involve converting a plan loan of Rs31.70 crore, a non-plan loan of Rs350.82 crore given by the central government and zero rate debenture of Rs75.03 crore given by the government on 31 December 2009 into equity and a subsequent reduction in the equity by Rs457.55 crore with a corresponding reduction in accumulated losses.
The plan loan, non-plan loan of Rs28.16 crore and zero rate debenture of Rs14.30 crore given by the government to subsidiaries of Burn Standard Company as of 31 March 2009 will be converted into equity and subsequently the equity will be reduced by Rs42.46 crore with a corresponding reduction in accumulated losses.
The government will provide Rs14.16 crore non-plan fund in the form of equity for discharging current statutory liabilities as of 31 March 2009. Besides, it will waive normal and penal interest on the Rs639.15 crore loan to Burn Standard Company as of 31 March 2009. No further interest would be levied on the company beyond the cut off date of 31 March 2009.