Government may divest up to 10 per cent stake in BHEL
19 June 2009
The UPA government is considering proposals to divest up to 10 per cent stake in Bharat Heavy Electricals Ltd (BHEL), minister of heavy industries Vilasrao Deshmukh said today.
Shares of the company rose on stake sale prospects and on reports that the state-run power equipment major would sign agreements with various state governments and foreign companies for power projects.
Deshmukh added that the stake sale was under active consideration but no final decision had been taken. He said that in principle the government was not opposed to disinvestment.
Another company that is being considered for disinvestment is the loss-making Tide Water Oil (India) Ltd - in which the government holds 26.2 per cent through unit Andrew Yule & Co Ltd - and Tyre Corp of India.
The 10 per cent BHEL disinvestment had been first proposed in 2005 but had to be shelved following opposition from the communist parties on which the government was dependent for support.
A joint venture agreement between BHEL and Madhya Pradesh Power Generation Co to set up a 1,600 megawatt super critical plant is likely to be signed within the next three months. BHEL is also expected to sign a pact with Siemens AG for technical collaboration for steam turbines and generators, Deshmukh said.
"BHEL and Gujarat State Electricity Generation Co would also sign a pact to build another 800 MW super critical thermal power plant," he said.