MMTC, STC, PEC look at merging businesses

MMTC Ltd, State Trading Corporation (STC) and Project Equipment Corporation (PEC) are considering merging their businesses to form a $10 billion (Rs 43,000 crore) Navratna-status company.

MMTC Ltd, the largest of the three companies, is seeking approval for the merger from its 2,000-odd employees this week, and State Trading Corporation and PEC will launch a similar exercise next month.

The merger, recommended by management consultancy McKinsey, will create a behemoth of over 3,000 employees, with a combined turnover of more than Rs 27,000 crore (2005-06 figures).

The merger is part of a larger exercise to improve the profitability of these companies that currently have overlapping areas of operation, which sees them eat into each other’s margins. A “navratna” is a profit-making public sector company with significant financial autonomy.

Read more in The Business Standard article.