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May 3, 2002 | 1315 IST
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Hectic quarter ahead for divestment department

Gaurav Raghuvanshi

The divestment ministry has lined up the single largest divestment effort for the next two months and hopes to sell off the government equity in nearly 20 entities, including Indian Petrochemicals Corporation Ltd, Maruti Udyog Ltd, Shipping Corporation of India, National Aluminium Company Ltd and the remaining India Tourism Develop-ment Corporation properties in the first quarter of the current fiscal.

Realisation from the divestment process is expected to exceed the total receipts of Rs 71.65 billion in the last eight years.

"A couple of meetings of the Cabinet Committee on Divestment are expected soon after the current Parliament session gets over on May 14.

"If all goes well, we will complete the divestment process in IPCL, Maruti, NFL, Nalco and the remaining ITDC properties by May end, followed by Shipping Corporation and Hindustan Organic Chemicals Ltd by June," a senior official said.

The government on Tuesday finalised an agreement with Suzuki Motor Corporation on divestment in Maruti.

A Cabinet note spelling out the details of the control and the renunciation premiums to be paid by the Japanese auto giant and the pricing of the rights issue would be discussed at the next meeting of the CCD, sources said.

A team comprising divestment secretary Pradeep Baijal and outgoing heavy industries secretary Ravindra Gupta finalised the details of the deal with the visiting Japanese team after three months of negotiations, sources added.

Besides Maruti, financial bids for the 26 per cent government equity in IPCL have already been received and will be opened at the next meeting of the committee of secretaries, following which the issue will be taken to the Cabinet Committee on Divestment for a final decision.

Downstream petroleum major Indian Oil Corporation, Reliance Industries Ltd and detergent maker Nirma have bid for IPCL. The race is expected to be primarily between IOC and Reliance.

The exit of Ramvilas Paswan from the National Democratic Alliance government at the Centre is expected to speed up the divestment process in Nalco, which the former coal and mines minister was opposing.

"With Paswan's departure, we hope that the ADR/GDR issue for 15 per cent of the company's equity, as also the sale of another 30 per cent shares to retail and institutional investors will happen soon," the senior official said.

The sale of 16 hotel properties of ITDC is also expected to be completed by May-end. Expressions of Interest for the properties had already been received, he said.

Due diligence by nine short-listed bidders for Shipping Corporation had started this week and financial bids would be called in mid-June, the official said, adding that the sale of the 33 per cent government equity in Hindustan Organic would also be completed within the first quarter of the current fiscal.

If HPCL and BPCL were also sold off within the next couple of months, the government would easily surpass its budget target of earning Rs 120 billion from divestment in the entire year within the first six months of the current fiscal, the official said.

In the first divestment of the current fiscal, 26 per cent government equity in Hindustan Zinc Ltd was sold to Sterlite Industries for Rs 4.45 billion last month.

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