The Union Cabinet on Wednesday approved the closure of Hindustan Cables Limited (HCL) and infusion of Rs 4,777.05 crore towards payment of salaries, offering early retirement schemes, conversion of loan into equity etc.
“Union Cabinet under chairmanship of Prime Minister Narendra Modi has given its approval for closure of Hindustan Cables Limited (HCL), Kolkata as per the provisions of the Companies Act, 1956/2013, Industrial Disputes Act, 1947 and other relevant Acts,” a Finance Ministry statement said.
“Total cash infusion for the company’s closure will be Rs 1,309.90 crore and non-cash infusion of Rs 3,467.15 crore in the form of conversion into equity of government’s outstanding loan (including interest) as on September 30,” the statement further said.
The employees are set to be offered attractive VRS/VSS packages at notional 2007 pay scales. Disposal of assets of the company will be as per the Department of Public Enterprises guidelines with regard to time-bound closure of sick/loss making Central Public Sector Enterprises (CPSEs).
Secured creditors of HCL, led by SBI as consortium lenders had gone in for One Time Settlement (OTS) of dues which include complete waiver of interest and settlement of principal amount of Rs 305.63 crore.
HCL was established in 1952. It had four manufacturing units at Rupnarainpur and Narendrapur (West Bengal), Hyderabad (Telangana) and Naini (UP).
It was set up to cater to the needs of government-owned telecom companies BSNL and MTNL for manufacture of telecom cables. Due to rapid change in telecommunication technology (wire-line to wireless), the demand for telecom cables has been drastically reduced.
Several attempts were made by Department of Heavy Industries for revival of the company but failed. Attempts to transfer HCL units to Ministry of Defence/Department of Defence Production also did not yield results.