Calcutta, April 18: Phoenix Yule Ltd’s expansion plan in Bengal has become uncertain following the Centre’s opaque policy on divestment.

Andrew Yule, a sick diversified public sector unit under the ministry of heavy industries, holds a 26 per cent stake in Phoenix Yule, while the rest is held by Phoenix BV, part of the 16-billion-euro German Continental group.

Phoenix has earmarked a Rs 45-crore expansion plan to install a new steel cord belt production at Kalyani in north 24 Parganas.

While the foreign partner is equipped to shell out funds for the project, Andrew Yule is in no position to contribute its share.

“It (expansion) looks a little uncertain at this point. Both the joint venture partners have to bring in funds based on their respective stakes in the company,” said T.K. Mukherjee, managing director of Phoenix Yule, the Calcutta-based conveyor belt manufacturer.

One of the options before Andrew Yule would be divesting its stake in Phoenix Yule, making it a 100 per cent Phoenix subsidiary.

The German company had the option to buy the government’s remaining stake back in 2004. But no stake was sold after the Left-backed United Progressive Alliance government came to power.

“Ideally, the stake sale should precede the expansion project,” Mukherjee added.

Phoenix picked up a 76 per cent stake in 1999 from Andrew Yule and it had the option to buy the remaining 26 per cent in the next five years.

The foreign partner had carried out the valuation of the joint venture twice ? in 2003 and 2004.