Only 5-year foreign loans for selloffs

NEW DELHI: The government will not permit companies to raise less than 5-year foreign currency loans to fund PSU divestment.
According to finance ministry officials, this route has been particularly opened up to permit companies raise foreign currency loans to meet the takeover code requirements when government offloads stake exceeding 15 per cent to a bidder in a listed PSU.
In that case, the bidder would be required to make a public offer to buy 20 per cent under the takeover code. Since the department’s experience has been that in many sectors, bidders do not have sufficient funds to bid for PSUs, the 20 per cent public offer under the takeover code is an additional burden.