Govt to park PSU assets in new company

The finance ministry will move a cabinet note next week seeking to dissolve the specified undertaking of UTI (SUUTI) and transfer its assets to a new company which can tap the reserves of cash rich firms to help government meet its disinvestment target of Rs 40,000 crore this financial year.

Under the plan, the assets of SUUTI, estimated at around Rs 50,000 crore, will be pledged to the new government-owned company, which in turn can utilise the proceeds to buy government equity in state-owned firms.

“The cabinet note will be moved next week for setting up the new holding firm,” a finance ministry official said on Thursday.

Although the government has plans to raise Rs 40,000 crore from disinvestment in the current fiscal, it has not been able to make much headway because of uncertain market conditions.

So far, it has raised only Rs 1,144 crore from stake sale in Power Finance Corporation (PFC).

There are some companies that have more surplus cash than their annual turnover. That surplus can be invested in some state-owned blue-chip companies.