BANGALORE: The State Government on Thursday filed a memo in the Karnataka High Court stating that the now defunct New Government Electric Factory (NGEF) could be revived by setting up two special purpose vehicles (SPV).

While one SPV could deal with the motor and transformer division, another could harness the immense real estate potential of the company on Old Madras Road.

While the first SPV can be tentatively named NGEF Motor and Transformer Ltd., the SPV dealing with real estate can be titled NGEF Real Estate Ltd.

The revival package prepared by a consultancy firm and approved a few days ago by the State Government said the core business of NGEF — of motors and transformers — could be revived. Similarly, the surplus real estate belonging to the company on Old Madras Road can be profitably harnessed to ensure that NGEF benefited from the high real estate value.

The memo said the current value of the assets of NGEF, including land, plant and machinery, exceeded its liabilities. If the assets can be put to optimum use, the company can once again have a new life. The surplus real estate (grounds surrounding NGEF) can be profitably developed either independently or by collaborating technically and financially with other companies.

The package envisages the transfer of NGEF assets through two SPVs. Once the revival scheme became operational and the SPVs were set up, the net worth of the company will become positive and the company will be in a position to sell its liabilities.

Shares

It said NGEF Real Estates would issue and allot to NGEF (without further application) 10 lakh equity shares of Rs. 10 each amounting to Rs. 1 crore. This would be credited as fully paid up capital at par in NGEF Real Estates. Both NGEF Motor and Transformer Ltd. and NGEF Real Estates Ltd. would then individually frame their respective independent line of activity and resources. They would then find business partners to operate their spheres of activity in a profitable manner.

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