SCI open offer not for foreigners

NEW DELHI: THE disinvestment ministry has shot down a proposal seeking to allow foreign partners in consortia bidding for 51 per cent stake in Shipping Corporation of India to make open offer after sale and thus acquire up to 45 per cent holding.
Disinvestment ministry sources told ET that the open offer would have to be made by special purpose vehicle formed by bidders for SCI.
“CCD had taken a decision to permit only minority holding to the foreign companies joining hands with domestic companies to bid there can be no change in that,� these sources said.
They added this condition could not be changed just for the sake of better price.
This would imply that foreign partner in the consortium would be allowed to hold a maximum of 35 per cent post open offer, assuming FIs and retail investors tender their holdings in the open offer.
Foreign partner’s holding in SCI will always have to be in proportion of its holding in SPV, sources said.
The bidding document for SCI stipulates that Indian partner should be majority shareholder in SPV. Thus, Indian partner(s) would be required to hold at least 51 per cent in SPV.
Bidding condition further stipulates that foreign company can acquire a maximum of 25 per cent SCI’s equity of the 51 per cent being divested in favour of strategic partners.
Government, which currently holds 80.12 per cent in SCI, while the balance 19.88 per cent is held by Unit Trust Of India, Life Insurance Corporation, General Insurance Corporation , foreign institutions and retail investors. Government has decided to divest 51 per cent to the strategic buyer and offer 3.12 per cent to company employees.
The government holding would fall to 26 per cent post divestment.