Progress on MUL selloff still remains hazy

NEW DELHI: Disinvestment Ministry and Suzuki Motor Corporation seem to send out contradictory signals on the progress of talks for the proposed dilution of government holding in the joint sector automobile company.

While Disinvestment Secretary Pradip Baijal says that the two parties have reached an agreement of the proposed rights issue, its pricing and control and renunciation premium, Suzuki representatives in the country insists that talks are still on and decision has not been arrived at.

“We don’t know why government is saying an agreement has been reached,� a senior Suzuki representative said, when contacted. Neither party is, however, willing to divulge details of the proposed rights issue.

Disinvestment ministry insists that details such as price of the share and control premium have been sorted out and that it would be put before the Cabinet Committee for Disinvestment when it meets in the next couple of weeks.

The CCD had last October approved a Rs 400 crore rights issue for the first stage of dilution of government stake in the country’s largest car manufacturer.

The CCD had also cleared renunciation of the government’s share of the rights issue to the highest bidder, which could be Suzuki, in lieu of a control and renunciation premium.

It is not known what would be the level of government holding post rights issue, though it is widely speculated that there could be 5-10 per cent dilution.

The CCD meeting has not been scheduled, though it is expected to be held during the second week of May.