CCD meet today to review SCI divestment

NEW DELHI: The disinvestment of Shipping Corporation of India (SCI) is set to gather steam soon with the government scheduling a meeting of the Cabinet Committee on Disinvestment (CCD) on Friday to review an earlier decision on the quantum of shares to be offered to a foreign buyer.
The government is divided over the issue. The finance ministry is in favour of offloading the entire 51% to foreign buyers, while the disinvestment ministry prefers the CCD’s earlier decision, under which, a 25% cap was imposed for foreign buyers. The finance ministry feels that SCI would fetch a better value if a foreign buyer is offered majority control. The ministry’s also of the view that foreign companies will bid only if they were assured majority control.
SCI had originally attracted expressions of interest (EoI) from several multinational shipping companies, but they withdrew when several conditions on their bidding, including the cap of 25%, was imposed. As of now, Essar Shipping with American Marine Associates, Sterlite and Videocon are interested in bidding for SCI, though the market buzz is that Sterlite may not pursue the deal any further.
The issue of offering 51% to foreign buyers came up at a meeting of the core group of secretaries on disinvestment early last month. Although there was no consensus at the meeting of the secretaries, it was decided that the proposal to offer 51% to foreign bidders should be referred to the CCD. The secretaries panel felt that if a change in SCI’s divestment plan was required, the CCD should be the one to review the decision.
The CCD, at a meeting on December 21, ’01, had decided that majority control of SCI should be transferred to Indians. The committee had said that foreign bidders would have to jointly bid with Indian partners and that a foreign buyer cannot buy more than 25% of the SCI shares in the strategic sale.