When an organisation is on a slippery slope, the first to bail out are the employees. But this isn’t a viable option for the nearly 30,000 employees of Hindustan Aeronautics Limited (HAL). After all, they have coveted government jobs.
The employees of the country’s sole military plane maker, however, did clarify what they thought was the prospects of the government-owned company. When the government decided to divest 10% of its holding in HAL in March 2018, it reserved 6,68,772 shares for employees of the Bengaluru-headquartered company. But HAL employees only subscribed to a fifth of the reserved shares. They probably saw the writing on the wall. The response of retail investors was also poor to the government’s bid to raise Rs 4,200 crore via the share sale. Finally, Life Insurance Corporation came to the rescue and purchased 70% of the shares on offer for about Rs 2,800 crore.
HAL hit a new low in January when Chairman R Madhavan said the company had taken a loan of Rs 1,000 crore to pay salaries. The fact the aerospace company was gasping for cash would not be surprising, given the central government had taken Rs 11,000 crore through buybacks and dividends from it in the past four years. Read more