Another setback to SIL divestment: Atul Auto may pull out

The government's move to divest its stake in beleaguered Scooters India Ltd is running into rough weather, with another possible bidder Atul Auto today saying it will pull out of the race if the process takes long.

Earlier, auto majors Mahindra & Mahindra and Piaggio had withdrawn from the race to acquire the state-run firm.

"As on date I am interested in acquiring a majority stake in Scooters India. Yet, the way things are the moment it is going to take a long time. I cannot wait forever. So if the process takes long then I will have to pull out and look for options elsewhere," Atul Auto Director Vijay Kedia told PTI.

He said the company has earmarked Rs 150 crore for the next two years on acquisitions and setting up new plants.

In May, the government had announced to divest its entire 95.38% stake in Scooters India Ltd (SIL), which primarily manufactures three-wheelers, with an aim to revive the company that has been incurring losses since 2002-03.

After the Cabinet had approved it, the proposal was supposed to be introduced in the monsoon session of Parliament for approval so that the stake sale exercise is completed within this fiscal.

Out of the private firms, including M&M, Piaggio and Atul Auto, that have evinced interest in acquiring SIL, only Lohia Auto is willing to wait.

"We are commercially looking into it and we will go ahead with the process," Lohia Auto Industries Chief Executive Officer Ayush Lohia said.

In July, M&M had said it decided not to acquire the beleaguered PSU firm, as it has "various things" to do.

"We have done our analysis and we have decided not to go after it. We are not pursuing it anymore," M&M President (Automotive and Farm Equipment Sectors) Pawan Goenka had said.

He, however, had said not participating in the race to acquire SIL does not mean that M&M would never look at the option in the future.

Another three-wheeler maker Piaggio, which was earlier said to have been interested for a pie in SIL, had immediately said it was staying away from the acquisition.

SIL's entire networth completely eroded by 2008-09. In March 2009, the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises (BRPSE). As on 2009-10, it had a net loss of Rs 22.03 crore.