Disinvestment of Jammu and Kashmir Cements Limited approved
Srinagar, October 9
The J&K administration on Sunday approved the disinvestment of Jammu and Kashmir Cements Limited (JKCL) as the company was not able to sustain and manage its finances properly, an official spokesman said here.
After exploring all possibilities for revival of JKCL, the Administrative Council (AC), which met here under the chairmanship of the Lieutenant Governor Manoj Sinha, approved the proposal for its disinvestment, the spokesman said.
Rajeev Rai Bhatnagar, Advisor to the Lieutenant Governor and Arun Kumar Mehta, Chief Secretary, Jammu and Kashmir, attended the meeting. The disinvestment was necessitated as the company was not able to sustain and manage its finances properly and maintain efficiencies of operations, the spokesman said.
The company was also not able to fully exploit its potential and sustain stiff competition in the market despite having dedicated limestone mining leases at its disposal, he said. Despite enjoying economies of scale, the company failed to show requisite growth and generate cash flows and operating margins during the last more than two decades, the spokesman said.
The company, despite having assured demand from the government against advance payments, has not grown even marginally over the long period of time and has rather shown a sharp decline in its production and revenues from 2012-13 onwards, he said.
The spokesman said managerial and financial inefficiencies, coupled with failure to exploit locational advantage, has made the company defunct, further depreciating plant and machinery without any resultant productivity.
The company had not only accumulated losses, but was also burdened with liabilities on account of salaries and outstanding wages and payments in addition to default in statutory deductions like GST, he added.
In October last year the Administrative Council had given in-principle approval for complete sale of JK Cements Limited by exploring the option of ascending e-auction and an authorisation to utilise 240 kanals of land adjacent to Khrew Plant at Industrial Estate, the spokesman said.
