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Govt approves $138 mn aid plan for Hind Copper

A Cabinet panel approved a Rs 6.74 billion restructuring plan on Tuesday for state-owned Hindustan Copper Ltd to make it more attractive to bidders ahead of its planned privatisation.

The government, which owns 98.95 per cent of the copper maker, invited bids in April to sell its entire stake in the firm to a strategic partner.

The sale is part of the government's plan to raise Rs 120 billion in the year ending March 2003 from sales of stakes in state firms.

A government statement said Hindustan Copper's restructuring plan included the conversion of a Rs 4 billion loan for an employee severance plan into a grant and the conversion of a Rs 715 million loan into equity.

The government will also waive outstanding interest of Rs 257.2 million and outstanding guarantee fees totalling Rs 67.5 million.

Hindustan Copper will receive a further Rs 1.3 billion grant to meet the expense of closing unviable mines and severance for 300 employees this financial year.

Government guarantees given to the company for raising working capital loans will also be extended by a further two years or until the company's sale to help meet some loan repayments, the statement added.

A government spokeswoman told a news conference after a meeting of India's Cabinet Committee on Economic Affairs that an "in principle" approval had also been awarded to a revival plan for the ailing Indian Iron and Steel Co.

She said the company had also been instructed to find a joint venture partner. Details of the package would be worked out later, she added.

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