Financial Daily from THE HINDU group of publications
Saturday, May 18, 2002
Financial Daily from THE HINDU group of publications Saturday, May 18, 2002 |
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Disinvestment Industry & Economy - Disinvestment Cabinet panel meet today on IPCL sell-off Our Bureau
NEW DELHI, May 17 THE Union Government will finalise the strategic partner for Indian Petrochemicals Corporation Ltd (IPCL) at a meeting of the Cabinet Committee on Disinvestment (CCD) to be held on Saturday. The CCD is also expected to clear the transaction documents for the privatisation of National Fertilisers Ltd, Government sources said. The Core Group of Secretaries on Disinvestment met here on Friday to consider the financial bids submitted by Reliance Industries Ltd, Indian Oil Corporation Ltd and Nirma Industries Ltd for acquiring a controlling stake of 26 per cent in IPCL. The group also recommended privatisation of Fertilisers and Chemicals Travancore Ltd (FACT) through a strategic sale of 51 per cent equity in the company, but deferred a similar proposal on the privatisation of Rashtriya Chemicals and Fertilisers Ltd (RCF). Sources, however, said that the proposal to privatise FACT would not come up for discussion during the CCD meeting on Saturday. ``It will be taken up at the next meeting of the CCD '', the sources said. In the case of IPCL, all the three bidders are understood to have quoted a price well in excess of the reserve price of around Rs 160 per share fixed by the Government. The book value of IPCL share is about Rs 134 per share. According to sources, the highest bid for IPCL is above Rs 200 per share. This is way above the traded market price of Rs 134.5 per share for IPCL scrip on May 16. The successful bidder will have to go in for an open offer for buying another 20 per cent of IPCL stock from the public in line with the takeover code stipulated by SEBI. The open offer price will be either at the bid price or the six-monthly average price of IPCL shares, whichever is higher. The Government has incorporated a put option in the third year and a call option in the fourth year for selling its residual equity of 25 per cent in IPCL post-strategic sale in which the strategic partner will have the first right of refusal. The Government will invite financial bids for the privatisation of NFL soon after the CCD clears the shareholders and share purchase agreements relating to the deal. Meanwhile, the Government has appointed ANZ Investment Bank as global advisors for the privatisation of Engineers India Ltd.
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