Joint venture to revive MAMC
June 11: A consortium of Coal India, Damodar Valley Corporation and Bharat Ear-th Movers today took over the Mining and Allied Machinery Corporation in Durgapur, winning an auction with a Rs 100-crore bid.
Calcutta High Court con- ducted the sale after the Board for Industrial and Financial Reconstruction (BIFR) had ordered the company’s closure in 2002.
The winning combine was today allowed to “take over and secure access to the assets of (the) MAMC” after it deposited Rs 18.75 crore. The rest has to be paid within 30 days.
When the court started the sale process in 2007, Coal India and the DVC had together sought a stay saying they wanted to assess the MAMC’s scope for revival. The two public sector enterprises then brought in a third partner, Bharat, and said they wanted to revive the MAMC.
The Durgapur plant was set up in 1965 with Soviet co-operation to make equipment for various mining industries. The company had diversified into the manufacture, erection and commissioning of bulk material handling plants and coal washeries.
However, it slipped into the red and was referred to the BIFR in 1992.
The Union cabinet has to approve the move by the consortium, but that is only a formality.
The acquisition will help the DVC source equipment and spares for its ageing thermal power plants and Coal India will get the much-needed equipment support for underground mining.
“I’m personally very happy,” said Coal India chairman Partha S. Bhattacharyya.
A study by IIM Bangalore and IDBI Capital, commissioned by the consortium, had indicated that the MAMC would need a working capital — from banks for day-to-day operations — of Rs 800 crore and an equity capital — raised from the owners — of Rs 200 crore.
Bharat holds a 48 per cent share in the combine while Coal India and the DVC hold 26 per cent each.
The study had also said that a revival would be possible if all the outstanding loans and other dues of the MAMC were written off. The company owes Rs 2,100 crore to the Centre, Rs 55 crore to the Bengal government and around Rs 750 crore to banks.
MAMC had 1,492 employees when the plant was closed. All of them had opted for a voluntary separation scheme over the years. But some 200 of them rushed to the factory gate today, sprinkled abir on each other and hoped that they would be called back.
“I was only 34 when the plant was closed,” said Radha Charan Samanta, who used to be in charge of a tool room. Nirmal Laha, 54, said: “I hope for another stint.”
Srinivas Das, 53, did not expect a recall, but said: “It will help our new generation.”
Such a streak of hope had yesterday coursed through Burnpur, only 30km away, when the Union cabinet approved the railways’ takeover of wagon-builder Burn Standard.