Another setback for Scooters India's divestment

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

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

"As on date I am interested in acquiring a majoritystake in Scooters India. Yet, the way things are the moment it is going to takea long time. I cannot wait forever. So if the process takes long then I willhave to pull out and look for options elsewhere," Atul Auto Director VijayKedia said.

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

In May, the government had announced to divest its entire95.38 per cent stake in Scooters India Ltd (SIL), which primarily manufacturesthree-wheelers, with an aim to revive the company that has been incurringlosses since 2002-03.

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

Out of the private firms, including M&M, Piaggio andAtul Auto, that have evinced interest in acquiring SIL, only Lohia Auto iswilling to wait.

"We are commercially looking into it and we will goahead with the process," Lohia Auto Industries Chief Executive OfficerAyush Lohia said.

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

"We have done our analysis and we have decided not togo 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 toacquire SIL does not mean that M&M would never look at the option in thefuture.

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

SIL's entire networth completely eroded by 2008-09. In March2009, the company was declared sick and went to the Board for Reconstruction ofPublic Sector Enterprises (BRPSE).