Disinvestment: BEML forms BEML Land Assets Ltd for demerger of non-core assets

• BEML had announced the appointment of Deloitte as consultant for advising, undertaking and implementing demerger of non-core assets ahead of its disinvestment
• The government has plans to hive off non-core assets of disinvestment-bound PSUs in order to make the deal more lucrative for investors

New Delhi: Disinvestment-bound defence PSU BEML has incorporated a new subsidiary — BEML Land Assets Ltd — for the demerger of surplus land and assets. In a regulatory filing to the stock exchanges on Thursday, BEML said, "… we wish to inform that the Company has incorporated a WoS in the name and style of "BEML Land Assets Limited" on 15.07.2021 pursuant to the approval of the Board of Directors based on the concurrence given by the Ministry of Defence, Department of Investment and Public Asset Management (DIPAM) and NITI Aayog for demerger of surplus land and assets of the Company as part of strategic disinvestment process undertaken by GoI."

The news comes a month after DIPAM and Niti Aayog approved the incorporation of a separate subsidiary in June for the demerger of surplus land and assets ahead of BEML's disinvestment.

Disinvestment: BEML has appointed Deloitte for de-merger of non-core assets

Earlier in March this year, BEML had announced the appointment of Deloitte Haskins & Sells LPP as consultant for advising, undertaking and implementing demerger of non-core assets of the company ahead of its disinvestment. The government has plans to hive off non-core assets of disinvestment-bound PSUs in order to make the deal more lucrative for investors. According to sources in DIPAM, the idea behind doing so is to allow investors to pay only for the core assets that they wish to acquire and not for surplus land and assets that have nothing to do with the core business.

Budget 2021 called for monetisation of non-core PSU assets

While presenting the Budget for 2021-22, Finance Minister Nirmala Sitharaman had said that idle PSU assets will not contribute to Atmanirbhar Bharat. While mentioning that non-core assets consisted largely of surplus land with government ministries/departments and Public Sector Enterprises, the minister had proposed to use a Special Purpose Vehicle (SPV) in the form of a company to carry out monetisation of idle land.

BEML's move to monetise non-core assets ahead of its disinvestment is in line with the announcement made by Sitharaman.    

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