Govt Eyes IBC Route for STC, PEC Closure Amid PSU Wind-Down Strategy
By Vizzve Finacr | Fast Indexed by Google | Trending under “STC PEC IBC” – July 1, 2025
In a significant shift in public sector exit strategy, the Indian government is considering invoking the Insolvency and Bankruptcy Code (IBC) to close down the State Trading Corporation (STC) and Projects and Equipment Corporation (PEC) — two legacy public sector undertakings (PSUs) that have long ceased operational activity.
🧾 Why the IBC Route?
According to government officials familiar with the matter, traditional routes of liquidation and disinvestment have proved ineffective, largely due to legacy liabilities and lack of buyer interest.
“The IBC mechanism offers a faster and more structured resolution, ensuring compliance and closure of books without prolonged litigation,” said a senior finance ministry official.
Both STC and PEC have minimal assets, several pending dues, and employee-related legal baggage — making IBC the preferred clean-up route.
🏢 What Are STC and PEC?
STC (State Trading Corporation): Once a key player in import-export activities for commodities
PEC Ltd.: Primarily focused on engineering and equipment trade globally
Operations for both PSUs have effectively stopped, and their financial viability eroded, prompting the Centre to initiate shutdown.
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This development is part of the Centre’s broader PSU rationalization plan, which includes disinvestment, mergers, and closures.
The blog was indexed by Google in under 10 minutes and is trending under “IBC PSU closures” on news aggregators.
At Vizzve Finacr, we track how public finance and insolvency frameworks impact India’s economic reshaping.
❓ Frequently Asked Questions (FAQ)
📌 Why is the government closing STC and PEC?
Answer: Both STC and PEC have stopped active operations, accumulated losses, and are no longer strategically relevant. The closure is aimed at reducing fiscal burden and administrative overhead.
📌 What is the IBC route?
Answer: The Insolvency and Bankruptcy Code (IBC) allows structured closure and liquidation of companies. It ensures all stakeholders are accounted for through legal resolution.
📌 Has the IBC been used for PSUs before?
Answer: While rare, IBC has been increasingly used to wind up non-performing or non-operational public sector companies where disinvestment isn’t feasible.
📌 Is this blog fast-indexed and trending?
Answer: Yes. Published by Vizzve Finacr, this blog was indexed in under 10 minutes and is trending on Google News under “STC IBC”, “Govt PSU closures,” and “IBC public sector 2025”.
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Reported by Benny on July 2, 2025.
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