BIFR approves BHPV, BHEL merger

Manish, TNN | Aug 30, 2013, 03.50PM IST

VISAKHAPATNAM: The merger of Bharat Heavy Plate and Vessels Limited (BHPV) with power equipment manufacturer Bharat Heavy Electricals Limited (BHEL) was finally approved by the Board for Industrial and Financial Reconstruction (BIFR) in New Delhi on Thursday. According to sources, BIFR has approved the modified rehabilitation scheme submitted by BHPV and formal orders have been issued for the merger with immediate effect. Confirming this, BHPV managing director C P Chengappa said, "This is one of the fastest mergers to have taken place following the approval of the Union Cabinet in February. It will be a morale booster for the employees, who were looking forward to this moment."

Sources said that the merger scheme includes a financial package of around Rs 628 crore, including Rs 235 crore provided by BHEL for undertaking modernization at BHPV. Sources said the amalgamation of BHPV with BHEL will be finalized once the formalities are completed with the Registrar of Companies. With the merger, BHPV will become the 17th unit of BHEL. Commenting on the developments, CITU general secretary G T P Prakash said, "We are happy that the merger of BHPV with BHEL is approved. All the BHPV employees will be part of the Maharatna public sector company in a couple of days. Therefore, our request is that the BHEL management consider the issues related to upgrading of scales at par with BHEL employees and make the necessary amends after taking over BHPV." Other union representatives including B Penta Rao of TNTUC, K Sudhakar of YSRTUC and George Babu of BHPV SC/ST Employees Welfare Association too welcomed the merger. BHPV's turnover crossed the Rs 200 crore mark after a gap of 10 years in 2012-13 when it registered a 56.36% jump in revenues at Rs 243.62 crore as against Rs 155.80 crore in 2011-12 fiscal. Its profit after tax also more than doubled to Rs 23.90 crore in 2012-13 from Rs 10.44 crore during 2011-12. The public-sector unit had posted a turnover of Rs 136.97 crore in 2010-11 with a profit of Rs 8.77 crore. Having achieved profits for the third consecutive year after being taken over by BHEL, sources said that with the merger, BHPV would be able to utilise its massive network for bagging projects and increasing profitability.