The Telegraph
Since 1st March, 1999
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Govt gives itself 6 months to pull out of five firms

Calcutta, July 11: The government has set a six-month deadline to offload its residual stakes in Videsh Sanchar Nigam (VSNL), Indian Petrochemicals Corporation (IPCL), CMC, IBP and Bharat Aluminium Company (Balco).

“We will start negotiations with strategic partners of these five companies next week. After that, we will place our shares in the market in six months. We are also talking to global investment bankers who will advise us on ways to go about it,” disinvestment minister Arun Shourie said after addressing the members of the Confederation of Indian Industry (CII) here.

The Cabinet Committee on Disinvestment (CCD) yesterday approved the proposal to sell the government’s residual stake in the five firms, that were privatised in the past three years, through a public offer.

“In the coming months, the government will be placing one good scrip after another to raise resources and also to reward Indian investors,” Shourie added.

The move to come up with a six-month time-bound offloading programme is aimed at raising Rs 13,200 crore through the sale of assets.

Shourie said the government’s divestment drive has also helped employees. “The wages of Balco employees have shot up by 20 per cent after the divestment,” he said.

Asked if the government was going to allow BSNL to raise funds through an IPO, Shourie said, “It is for the BSNL board to decide whether they will go in for an IPO or not. We are going to transform BSNL and MTNL from ministry-managed companies to board-managed ones.”

“The IPOs will hit the market one after another,” he said. The government recently garnered Rs 993 crore through the Maruti flotation.

Shourie did not specify the amount the government is expected to raise from the public offering of its shares in these companies, but said, “It will be substantial.”

HPCL selloff

Shourie today said work on setting up a data room for Hindustan Petroleum Corporation Limited (HPCL) was in full swing.

“Work is on to set up a data room. However, the due diligence is yet to start,” he said.

He did not give any timeframe for the start of the due diligence process.

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