Govt likely to complete EIL, SCI sale by year-end

The government expects to complete the divestment of Engineers India and Shipping Corporation of India by the end of the financial year, disinvestment secretary Pradip Baijal said.
Speaking to reporters on the sidelines of the Ficci AGM here today, Mr Baijal said the documents for the two transactions were almost final, though some matters need to be sorted out. “We will try to call financial bids this year. We will try to complete the sales in the current year,� Mr Baijal said.
The government proposes to divest 51% of its holding in both EIL and SCI to strategic partners. The transaction documents — shareholders agreement and share purchase agreement — have to be cleared by the core group of secretaries on disinvestment and the Cabinet Committee of Secretaries on Disinvestment (CGD) before inviting financial bids.
Normally, the government gives the bidders about 15-21 days notice to submit their financial bids after the transaction documents are cleared by the minister’s panel. The divestment ministry had earlier planned to put the EIL privatisation on hold and it is understood that the ministry had moved a note to the CGD stating that the privatisation should be put on hold till further notice.
The disinvestment secretary also said the government would finalise the appointment of the consortium of JM Morgan Stanley and HSBC as co-bookrunner for Maruti’s proposed Rs 800-crore public issue.
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Kotak Mahindra Capital has already been given the mandate to be the lead bookrunner for the issue which would see the government’s holding in the carmaker fall to about 20% from the present 45.5%.
The CGD had yesterday cleared the appointment of JM Morgan Stanley-HSBC as the co-bookrunner for the issue.
In the same meeting yesterday, the CGD decided that public sector undertakings like ONGC, GAIL and BHEL should not be asked to withdraw from the race for 51% in EIL. ONGC and BHEL had submitted Expressions of Interest to join the race for EIL in May ‘02.
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Subsequently, on September 7, the CCD decided to bar PSUs from bidding for public enterprises in the disinvestment process. Following this, the disinvestment ministry wanted to bar the three companies from bidding for EIL.
This would effectively mean the CCD’s September 7 decision will not have retrospective effect. Meanwhile, ONGC and BHEL have decided to bid together for EIL and GAIL.