The government on Thursday approved a revival package worth Rs 128 crore for Hindustan Prefab Ltd (HPL), which has incurred losses in the last five years.
The package will be implemented by converting government loan of Rs 128 crore up to March 31, 2008 into equity.
Conversion of loan into equity would provide relief to the central public sector enterprise on account of high interest payment to the government, which was one of the key reasons for continuous losses.
HPL incurred a total loss of Rs 59.33 crore in five years ending 2008-09. However, the amount of loss has fallen from Rs 14.64 crore in 2006-07 to Rs 3.71 crore in 2008-09, indicating improvement in the company?s performance.
?With this approval, the accumulated losses will be set off against equity, and the company is expected to emerge as a viable and profit-making CPSE in the coming years,? information and broadcasting minister Ambika Soni said after the Cabinet meeting.
The conversion would increase the authorised share capital of HPL from Rs 10 crore to Rs 138 crore.
The Cabinet also decided to increase Telecommunications Consultants India Limited?s (TCIL) equity in its joint venture company Tamil Nadu Telecommunications Ltd (TLL) from Rs 6.95 crore to Rs 22.38 crore or 49% of the paid up equity capital through conversion of loans of Rs 15.43 crore into equity.
As per the decision, TCIL would also give bridge loans of Rs 12.5 crore till TLL organises credit from banks. ?This is subject to TCIL finding a suitable private strategic partner within a reasonable time,? Soni said.