SCI divestment in limbo, again

MUMBAI: The divestment of Shipping Corporation of India (SCI) is now hanging fire after the government decided to seek the views of its alliance partners. Ministry officials said the final clearance by the Cabinet committee on disinvestment was expected only after various political parties in the ruling government give a go-ahead. This, however, is not expected in the next one month, said sources.
The final shareholders’ agreement had already been despatched to all bidders 2-3 weeks ago. The whole process of calling for financial bids was awaiting the Cabinet approval.
“With the government going slow now, especially with divestment of profitable and sensitive companies, we do not expect the Cabinet committee to take up the SCI divestment now. The divestment process is expected to move further only after all coalition parties arrive at a consensus,� said sources. Also, with the winter session of the Parliament commencing soon, a Cabinet committee meet to approve SCI divestment is not expected soon.
There are four bidders left in the fray for SCI - Great Eastern Shipping, Essar Shipping, Sterlite Industries and Videocon. Some of the government’s guidelines, in terms of change of ownership and financing modes, have already dampened the spirits at the bidders camps.
The government has said no to any fresh equity infusion into SCI soon after the stake sale. It has also provided a put option for the remaining 26% stake at the end of first year, as against bidders’ demand of a call option. “We wanted more functional freedom and the 26% stake held by the government will curtail our freedom,� said a bidder.
However, despite mounting pressures from outside and within the government, ministry has taken up divestment of Cochin Shipyard and Hindustan Shipyard.