The Hindu Business Line : Four in race for 51 pc Govt stake in Engineers India

OIL and Natural Gas Corporation (ONGC), L&T-GAIL (India) Ltd combine, BHEL and Sun Group, Russia, are in the race to acquire a 51 per cent stake in Engineers India Ltd (EIL), which is on the privatisation block.

"ONGC, L&T-GAIL combine, Sun Group, Bharat Heavy Electricals Ltd (BHEL) and Soros Chatterjee Group were the only companies which went through the due diligence process," the EIL Chairman and Managing Director, Mr M.K. Dalal, told presspersons today.

He said the transaction documents including share purchase agreement have been vetted and were waiting Cabinet approval following which financial bids would be called for.

Currently, Government holds around 90 per cent equity stake in EIL and is selling 51 per cent stake to a strategic partner with another 10 per cent being divested to employees.

Disinvestment advisor ANZ had proposed that Government draws a special dividend of Rs 309 crore, at the rate of Rs 55 per share, from the Rs 636 crore reserves and surplus of the company. This has been opposed to by the EIL management.

"We have two major projects in hand and expect another one shortly. Execution of these would entail huge working capital requirements and if special dividend is drawn from reserves we will have to raise suppliers credit that in turn would affect our profitability," EIL Director (Finance), Mr D.S. Chakrabarti, said.

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