The Telegraph
Since 1st March, 1999
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HPCL selloff advisers to be picked next week

New Delhi, Feb. 13: The Centre will appoint financial advisers for the disinvestment of Hindustan Petroleum Corporation (HPCL) next week.

The disinvestment ministry has also decided not to take up any other public sector undertaking for privatisation in the current fiscal due to lack of time.

Speaking on the sidelines of a discussion on ‘Disinvestment: the task ahead’, organised by PHDCCI, Pradeep Baijal, secretary in the ministry of disinvestment, said, “No other company will be privatised in the current financial year.”

Baijal said efforts were still on to arrange a Cabinet Committee of Disinvestment (CCD) meeting before the start of the budget session on February 17. “We are trying to finalise a date for holding the CCD meeting before the budget session,” he said.

The government has already received expressions of interest (EoIs) from seven to eight financial advisors for HPCL. “We will offer the mandate next week,” said Baijal.

He indicated that an inter-ministerial meeting will be held next week to discuss the modalities for the divestment of the government's stake in Bharat Petroleum Corporation (BPCL).

Last month, the Cabinet decided to sell 34.1 per cent equity in HPCL through a strategic sale, while offloading 5 per cent to employees. The government will retain 12 per cent of the equity.

It also decided to sell 35.2 per cent equity in BPCL through a combination of an Indian public offer as well as through issue of depository shares in the global market. Employees of the company will get 5 per cent of the equity. The government will retain a 26 per cent shareholding after divestment.

Baijal said the initial public offering (IPO) for Maruti Udyog, the country's largest carmaker, will not take place this fiscal. Earlier, there were rumours that the IPO would hit the market by the middle of March.

“We are still looking into Sebi’s rules and regulations before finalising the issue prospectus. Besides, Maruti Udyog officials still have to furnish some details relating to the flotation. We hope to launch the IPO by April or May,” he added.

On the controversial selloff of National Aluminium Company (Nalco), Baijal said the due diligence exercise will resume in a short while after discussions are held with all the stakeholders.

The Orissa government has objected strongly to the Nalco selloff and the due diligence exercise had to be abandoned abruptly last October when a team from A V Birla group's Hindalco was attacked by Nalco workers.

Baijal said the privatisation of Air-India “cannot go ahead at this stage. The market is just not right for the sale.”

The disinvestment secretary said there was a need to hasten the selloff process in order to jump-start economic growth and reduce losses to the taxpayers.

He also reiterated that since increase in private capital had led to a higher rate of growth, the government should try and hand over public sector assets to the private sector.

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