September 08, 2008

BEML to pick up 48%, CIL, DVC 26% each in MAMC

PTI reported that Bharat Earth Movers Limited, Coal India Limited and Damodar Valley Corporation have agreed to pick up 48%, 26% and 26% stakes respectively in the special purpose vehicle being formed to revive the closed public sector Mining and Allied Machinery Corporation in West Bengal.

BEML will be the main operator for MAMC as equipment manufacturing and had earlier sought 51% stake but both CIL and DVC pressed to retain at least 26% each to maintain a certain control in the SPV.

Mr Asim Burman CMD of DVC told PTI that "We have started due-diligence process and we will submit the revival package to the court for approval to go ahead with the process. A consultant would be appointed to prepare the revival package and it would be submitted within the next 13 weeks.”

Currently, MAMC is closed and all employees have been separated through a voluntary retirement scheme. MAMC's liabilities are estimated at INR 1,800 crore. Once MAMC is operational, BEML is likely to restart manufacturing underground mining equipment and spare parts for power plants. Revival of MAMC will help backward integration of CIL and DVC, while for BEML, it will help in diversification into mining equipment.