The Cabinet Committee on Economic Affairs (CCEA) also granted ‘in principle’ approval for strategic disinvestment of the company that will be carried out at a later stage, according to a news report published in The Hindu.

 

Rs 111.59 crore loan would be used to settle outstanding statutory dues payable to its retired employees such as provident fund and gratuity as well as dues payable to the Central Industrial Security Force.

 

Also, the cabinet approved the closure of Hindustan Cables by offering a golden handshake to its employees and Rs 305 crore one-time settlement to a consortium of its lenders led by State Bank of India. In all, the centre has agreed to bear Rs 4,700 crore to fund the unit’s closure, of which cash infusion will be Rs 1,309.90 crore and non-cash infusion of Rs 3,467.15 crore whereby the government’s loan and interest dues pending on the company’s books, would be converted to equity.

 

According to an official statement, “There is no production activity in the company since January 2003. Due to non-payment of salary and wages, it is very difficult for the employees to survive...With the present time bound closure of the company, the valuable assets of the company will be available for other optimum utilisation.”

 

As per its guidelines, public sector firms were to be categorised into strategic or non-strategic and ministries were to prescribe their revival or restructuring strategies. The department has stressed that the Centre has decided on an uniform policy for offering voluntary retirement to workers of firms that can’t be revived and modalities for disposing off their assets, the report added.