The Union Cabinet, on Thursday, approved steps for disinvestment in Tyre Corporation of India (TCI) under which it will allow TCI to form JV with private company.

The disinvestment would be carried out through an amendment in Tyre Corporation of India Ltd (Disinvestment of Ownership) Bill, 2007.

“The Cabinet gave its approval for making necessary amendments in TCIL Bill, 2007 pending in the Lok Sabha,” Parliamentary Affairs Minister P R Dasmusi told reporters after the Cabinet meeting.

He said the company could be revived in a sustainable manner only through joint venture, which would require a change in the nature of public sector enterprise (PSE).

TCIL was incorporated in 1984 as a wholly-owned central PSE. However, due to shortage of working capital, the commercial operations could not be sustained. The corporation had to stop production under its own brand name and started making tyres for other reputed brand names.

Call option notice

Meanwhile, Cabinet Committee on Economic Affairs (CCEA) considered the call option notice given by Sterlite Industries India Ltd to acquire around 10.8 crore equity shares held by the government in erstwhile public sector unit Balco. As per the agreement, Sterlite will have first option to buy back remaining residual shares of the government in Balco.

With Sterlite exercising its call option notice, the CCEA decided to constitute a Committee of Secretaries (CoS) for finalising government’s position considering the legal issues as and when the need arises.