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Our Bureau

New Delhi , June 16

THE Union Government has decided to go ahead with its proposed stake sale in Bharat Heavy Electricals Ltd despite opposition from its Left allies. The Government has invited bids from global investment banks to manage the public offering. The investment banks are expected to submit their bids by July 11, according to an advertisement posted on the Web site of the Department of Disinvestment.

The Government proposes to sell 10 per cent of its stake in BHEL through a public offering of shares. After the sale, the Government's stake in the engineering firm would fall to 57.72 per cent from 67.72 per cent. According to the advertisement, up to 15 per cent of the offered shares will be reserved for BHEL employees.

On May 26, the Cabinet had approved plans to sell a 10 per cent stake in BHEL, which led to an immediate protest from the Left parties which felt the move was a breach of the Common Minimum Programme, which was against disinvestment in profit-making public sector units.

If successful, the BHEL sale will be the first divestment by the Government this fiscal year. Although the Government has not assumed any revenue from privatisation in this year's budget because all such realisations are expected to go to the National Investment Fund, the Finance Minister, Mr P. Chidambaram, has set an informal target of raising as much as Rs 7,000 crore from selling stakes in State-owned companies.

According to the advertisement, the Government will appoint two book runners-cum-lead managers (BRLMs), who could be asked to form a syndicate with the co-managers, in consultation with the Government. The task of the BRLMs includes advising the Government on the timing and the modalities of the capital market offer and undertake pre-market research on pricing and allocation of shares and after sale support.

While giving the go-ahead for the disinvestment of 10 per cent of shares in BHEL, the Cabinet had also decided that stock of the company would be split so that more retail investors could participate in the offer.

Against CMP, says Left: Responding to the move, the CPI's National Secretary, Mr D. Raja, said the Left parties have voiced their opposition to disinvestment in profit-making utilities such as BHEL.

"We have told the Government not to go ahead recklessly with the disinvestment programme, especially in the case of well-run companies such as BHEL. By going ahead with the disinvestment process in BHEL, the Government is clearly dithering from the Common Minimum Programme agenda," he said.

Similar sentiments were voiced by CPI (M) leaders.

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