E&Y, Lazard & UTI arm in race for PTL selloff advisor post

CHANDIGARH: Ernst & Young, Lazard India, merchant banking division of UTI, ANZ Grindlays, Abacus Legal and Sicom are in the race for being appointed as advisor to the Punjab government in the disinvestment of Punjab Tractors Ltd.
Punjab government sources said these parties have submitted expression of interest and a final decision on the issue would be taken next month. The last date for submitting EoIs is tomorrow.
Considerable interest has been generated in disinvestment of Punjab Tractors since this is the first privatisation plan of the state government through the strategic sale route.
Punjab State Industrial Development Corporation (PSIDC) which holds 23.5% stake in the tractor maker plans to offload its entire holding to strategic investors. A number of rival tractor manufacturers and multinationals are said to be interested in picking up controlling stake in the company.
Punjab''s disinvestment director Vini Mahajan, said a global advisor for TFL divestment would be appointed by mid-September. This would be followed by appointment of a legal advisor and an asset valuer.
While decline in sales during the first quarter and failure of monsoon may impact the disinvestment process, it is felt serious players would be looking the investments from a long-term perspective.
“The Punjab government is proceeding with the disinvestment process as planned,� Mahajan said.
PSIDC managing director Viswajit Khanna said that depressed market conditions would not matter for a good investor.
While PTL sold 40,100 tractors during 2001-02, enjoying a market share of 18.3%, the situation is being watched from month to month during the current year.
The company, at this juncture, has zero inventory and the it hopes that rains during August would revive demand. PTL is also gearing to launch two new models during December 2002 as these would give added revenue and additional margins.
The new models proposed to be marketed include the 41 HP 741 tractor placed in between the existing 735 and 744 Swaraj models and a 22 HP Super 722 model which is expected to give it an edge over others in this HP bracket.
Around April 2003, it plans to add two new tractor models. These steps are expected to help PTL improve its market share.