Employees of the State Trading Corporation will be given the right to seek voluntary retirement conditional on the privatisation of the company under a 'one of a kind' proposal accepted by divestment ministry.
The 1,000-odd employees of the state undertaking would be given the right to apply beforehand (prior to divestment) for voluntary retirement which would be accepted only if the privatisation goes through, sources associated with the deal said.
The unique measure has been incorporated in the draft shareholders agreement which was cleared by the inter-ministerial group recently.
Usually, the employees of companies to be divested are not entitled to apply for premature retirement beforehand.
However, the unique proposal allows employees to put in their papers even before the company is sold-off subject to condition that it would be accepted only if it is privatised.
This step has been taken as the employees had petitioned the ministry fearing that their skill sets may not be required by prospective owners of the company primarily engaged in trading of commodities.
These proposals would now be put before a core group of secretaries whose decision would be subject to the consideration of Cabinet Committee on Divestment, the highest decision making body on divestment matters.
The conventional clauses on VRS provide that new management would be allowed to offer voluntary retirement schemes on terms which are no worse then those offered previously by the PSU.
The government proposes to divest close to 65 per cent stake in the company to a strategic partner along with management control where it currently holds 91 per cent stake.
It has mandated Ernst & Young to act as global advisors for the deal. Employees would also be offered 10 per cent of the equity under a stock option provision.
Earlier the government had decided to delink Tea Trading Corporation, a subsidiary of STC, from the company as a precursor to divestment.
As many as a dozen players had expressed interest in picking up government stake including Videocon, Adani group and foreign majors like Cargil.
