India’s boom in defence and the huge project worth Rs 32,000 crore coming to Goa could have positive consequences for EDC’s plans to sell off Goa Auto Ancillaries (GAAL), said Sidharth Kuncalienker, chairman.
Speaking to ‘The Navhind Times’, on Wednesday, he said that talks are on with Goa Shipyard Ltd (GSL) to take over GAAL for which a buyer is being sought. The 100 per cent subsidiary with land at Honda could be the manufacturing facility for GSL which is likely to need additional space for making components for the defence project, said Kuncalienker.
EDC is also in discussions with units that are suppliers to GSL and public sector units active in defence sector for sale of the subsidiary.
Discussions are on with two PSUs- Bharat Electricals and Bharat Dynamics both of which have shown interest in the deal. Of the two Bharat Dynamics is one of India’s manufacturers of ammunition and missile systems.
EDC is open to all options to divest itself of GAAL, said the chairman. However it is ideally looking out for a public or private buyer who is interested in running the plant. It would generate employment and benefit the local economy if the plant is in operations again.
The process is also on for sale of machinery and equipment. Most of the equipment of GAAL is sheet metal machinery and useful to units in similar industry.
EDC has taken a decision not to get involved into any business and stick to its core function of financial institution and hence the decision to sell off equity stake in GAAL, said Kuncalienker.
In 2014 the corporation divested 74 per cent stake in Goa Antibiotics to HLL followed by the decision to shed off stake in its other subsidiary GAAL.
The tender for sale of GAAL was first published in September 8, for which there was no response. A second tender was on September 23, for sale of machinery and equipment.
GAAL which was set up in 1976, is a fully owned subsidiary of the EDC, established with the twin goals of providing jobs to technicians in the hinterland and establishing a local automobile industry.