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Govt to sell rump holding in five firms

New Delhi, July 10: Disinvestment minister Arun Shourie today said the government will sell its residual stake in five firms it has privatised in the past three years through a public offer. These companies include software firm CMC, long-distance telephony firm Videsh Sanchar Nigam (VSNL), Indian Petrochemicals Corp (IPCL), oil retailer IBP and Bharat Aluminium Co Ltd (Balco).

The proposed sale is a part of the country’s privatisation drive that aims to collect Rs 13,200 crore through privatisation of these state assets.

The government will divest 26 per cent equity each in IBP, VSNL and CMC, and 33.95 per cent and 49 per cent stake in IPCL and Balco respectively.

“These will require amendment in shareholders’ agreement and share purchase agreements that the government had signed with the strategic investors,” Shourie said. “We will start dialogue with them soon.”

The Tata group currently holds majority stake in VSNL and CMC while Indian Oil holds the majority in IBP. Sterlite Industries holds the majority stake in Balco while Reliance Industries, the country’s largest private group, runs IPCL.

“The government would provide comfort to the strategic partners in case they want to raise their stake in the companies to 51 per cent by offering them the stake prior to the public offering,” Shourie said.

“The modalities relating to IPO and whether to go for ADRs or GDRs would be worked out after getting the consent of the strategic partner,” he said.

The disinvestment panel today also approved the shareholders’ agreement in Hindustan Organic Chemicals Ltd (HOCL), Minerals Exploration Corp Ltd (MECL) and National Fertilizers Ltd (NFL) which would enable the government to divest its equity in these firms.

“We will soon invite financial bids from private investors for sale of NFL as the Shareholders Act and Share Purchase Act has been approved,” Shourie said adding the government would divest its entire holding in HOCL and MECL.

He said the government would divest its 20 per cent equity in Dredging Corporation of India through a public offer and plough-back the collection to upgrade its fleet.

“The finance ministry has agreed to provide an identical amount for this purpose,” Shourie said.

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