Chinese firms express interest to acquire Nepal Metal

KATHMANDU, March 3:

At least two Chinese companies have expressed interest to acquire state-owned Nepal Metal Company Limited (NMCL), which has failed to start production even after over three decades of establishment.

The NMCL was established with the aim of extracting zinc-lead ores from Mount Ganesh area of Dhading district.

The two Chinese firms--South Asia Mining Energy Company Limited and Chenhui Mineral Energy Company Limited--have jointly approached the Ministry of Industry (MoI) offering their interest to take up the management of NMCL after acquiring company´s shares.

"The Chinese firms have shown interest to take over the company by acquiring all its shares. Whether to sell the company is now up to us," said MoI Secretary Krishna Gyawali.

Gayawali added that the ministry has asked the firms to submit a detailed proposal on share acquisition.

The company that never came into operation since its establishment in 1976 has an authorized capital of Rs 330 million.

"We will call the company´s board meeting to discuss the matter once we receive a hard copy of the proposal from the Chinese companies," Gayawali said.

According to a Ministry of Finance (MoF) report, the company´s board has already submitted its own business plan to the government to bring NMCL into operation.

"The board is currently awaiting government response," reads the MoF report.

The government has 75 percent stake in the company.

A source close to the firms said that the Chinese investors were ready to buy all shares in the company. "The firms are preparing a detailed proposal as demanded by the government," the source said. The company that never started its production, however, has 10 employees on its payroll.
Bimal Wagle, chairman of the Public Enterprises (PE) Board, said that it would be better to hand over the company if any party comes up with a viable business plan to operate it.

"Given the government´s failure to commence production at NMCL in more than three decades, PE Board will give a go ahead signal to the government to handover the company to any investor--domestic or foreign--if the investors´ intention is found good," said Wagle.

Source: Republica